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Offering Transaction Fees Waiver
Over the past week, there has been a handful of top Indian crypto exchanges looking to leverage the opportunity to expand their user base by luring users of foreign platforms like Binance and OKX. Accordingly, the exchanges offered appealing fee waiver benefits to assist users with moving their funds locked on prohibited international crypto platforms to theirs.
Data shows that Indian investors have up to $4 billion in these offshore crypto exchanges, adding to the anxiety of the situation. With recent legal changes, consumers who utilize these offshore exchanges are naturally anxious about whether they can still access their holdings, move them elsewhere, or sell them.
However, most holders aim to move their digital assets to a secure exchange that meets regulatory criteria and guarantees continuous crypto transactions. Meanwhile, Sumit Gupta, CoinDCX CEO, stated that there has been a 2000% increase in new inflows during the first week following the issuance of show cause notices to non-compliant firms by the FIU.
Accordingly, CoinDCX initiated a $1 million fund to boost trust in the Indian crypto community. This financial provision primarily intends to help investors transfer assets from the banned crypto exchanges to CoinDCX.
Gupta noted that CoinDCX’s motive goes beyond financial assistance. The crypto firm also guides users through the simple process of crypto deposits. The exchange is paying a 1% incentive and has set up secure deposit pathways to help affected users achieve a smooth and safe way to move their digital assets.
In Defense Of FIU
In a related development, BuyUcoin, another renowned Indian crypto exchange, recently launched a breakthrough offer of zero-fee transfers for consumers migrating from overseas exchanges in reaction to the Financial Intelligence Unit’s (FIU) prohibition.
BuyUcoin CEO Shivam Thakral supported the FIU’s decision, stressing its importance in protecting investors and maintaining compliance with capital flight restrictions. Similarly, WazirX offers consumers a 1% incentive for sending their crypto holdings to its platform.
This approach has resulted in considerable results, with a 42.3% surge in peer-to-peer transactions. There is also a 253% spike in spot trading volume and a 114% gain in total deposits (crypto + INR) between November and January compared to the three months before November.
Furthermore, Rajagopal Menon, Vice President of WazirX, commended the regulator’s timely steps. He added that the move addressed long-standing concerns of regulatory and tax discrepancies that hurt Indian exchanges, customers, and government income.
FIU’s Ban and Alternative Access
Recall that the FIU published a notice of non-compliance against 10 offshore crypto exchanges for unauthorized operations last month. The regulator gave these crypto exchanges a one-week response period and directed the government’s IT department to block the URLs of the affected platforms.
Last week, Google’s Indian app store blocked all overseas crypto exchange apps a few days after Apple’s app store made the move. As a result, Indian users who shifted to Binance to avoid a 30% crypto tax were affected by this development, which surprised them.
However, many Indian crypto influencers have recommended using virtual private networks to access the restricted platforms. Meanwhile, OKX has encouraged Indian consumers to update their personal information in response to regulatory concerns, indicating a planned effort toward FIU compliance.
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