Coinbase, which is a global crypto exchange, has officially informed users in India that it is disabling new user sign-ups on its exchange product in India in June. This follows the entry of Coinbase into the markets of South Asia and the associated regulatory obstacles. The closure date is specified as September 25, 2023, and users are advised to withdraw their entire balances until then.
Coinbase has deactivated the users’ accounts and instead advised them to download the Coinbase Wallet. Coinbase, as an entity, is investing in prime Indian crypto exchanges like CoinDCX and CoinSwitch Kuber. The Economic Times’ Indian press was the first to report the news that the exchange has fewer than 50,000 users in India. This is as per the data received from Sensor Tower.
This occurrence of closure comes after one and a half years of endeavor to reintroduce its service in India. There have been continuing confrontations with the concerned authorities in India, resulting in the exit of two senior executives, one of whom was Durgesh Kaushik, who held the position of Senior Director for Market Expansion. Where the Chief Executive of Coinbase, Brian Armstrong, is concerned, he came down to India in 2022 to introduce the exchange service in India and provide backing to the UPI payment scheme. This did not go down well with UPI, and Coinbase withdrew its support.
At the time, Coinbase was affiliated with the NPCI and other relevant organizations and was experimenting with unsuccessful payment models. Armstrong said their commercial activities in India had to cease due to the Reserve Bank of India’s subtle insistence. In addition, he mentioned that trading in cryptocurrencies is not unlawful in India and that taxation has been imposed. However, the relevant authorities do not appear inclined in that direction.
Since five years ago, the Indian authorities have been extremely cautious of cryptocurrencies and have looked to global associations on the matter. The G20 countries divulged a Leader’s Declaration, which spoke of the fact that countries are encouraging the suggestions made by the Financial Stability Board regarding regulations and control over the crypto asset space and markets.
Coinbase has requested that the FSB and SSBs promptly implement the recommendations. The company agrees with the FSB and SSB’s proposed crypto-asset strategy and the IMF-FSB Synthesis Paper. Coinbase agrees with their plan to support a comprehensive policy and regulatory framework. This is after considering the various risk factors associated with emerging markets and expanding economies. In addition, FAFT benchmarks for addressing issues related to money laundering and the financing of terrorism are implemented.