A well-known cryptocurrency exchange is currently engaging with Indian regulators as it contemplates a return to the market after pausing its operations in early 2023. This U.S.-based platform has started discussions with India’s Financial Intelligence Unit (FIU) to understand and adhere to regulatory requirements.
Recent developments include the exchange’s Chief Legal Officer, who has joined the global board of the US-India Business Council (USIBC). This council is designed to promote business collaboration between the United States and India. The Chief Legal Officer expressed a commitment to fostering financial innovation and enhancing the relationship between the two countries in the financial sector. He remarked on India’s rapidly expanding Web3 ecosystem, which is characterized by a robust developer community, innovative startups, and substantial institutional support. Since 2018, India’s share of global Web3 developers has significantly increased.
Previously, the exchange stopped its services in India in September 2023, advising users to withdraw their funds. While the exact reasons for this exit were not disclosed, it followed a series of challenges in the Indian market. Earlier in April 2022, the platform had to halt its United Payments Interface (UPI) service shortly after its launch due to the National Payments Corporation of India’s (NPCI) statement that it did not acknowledge cryptocurrency-related UPI transactions.
Despite the past hurdles, the exchange’s return to India occurs amidst a rigorously regulated environment for offshore cryptocurrency platforms. In late 2023, the FIU enforced restrictions on several foreign exchanges, but it later sanctioned Binance and KuCoin, permitting them to operate after they paid penalties in May 2024. Additionally, by September 2024, reports indicated that other offshore exchanges were undergoing evaluation for potential approval.
The ongoing discussions with regulators indicate a potential shift in the exchange’s strategy, focusing on compliance and structured engagement with the Indian market to navigate the complex regulatory landscape effectively. As India continues to implement a strict approach toward foreign crypto exchanges, the exchange’s efforts signal a renewed interest in establishing a presence in the country, riding on the momentum of India’s burgeoning digital finance environment.