January 18, 2024
By Anjali Kochhar
While Indian crypto exchanges have had a bad year, some are seeing a light at the end of the tunnel. Following the Financial Intelligence Unit’s (FIU) strict actions against offshore virtual digital assets (VDA) service providers, there has been a remarkable increase in user registrations and deposits on Indian cryptocurrency platforms. Leading cryptocurrency investing site Mudrex stands out with over 35,000 new customers and over $2.5 million in deposits, a large amount of which is made up of digital assets. Users’ confidence in platforms that prioritize adherence to changing legislation is reflected in this spike.
Edul Patel, CEO of Mudrex, highlighted the platform’s success since the FIU notification, stating, “We saw about 35,000 investors come in since the FIU notice came out and deposit roughly $2.5 million in the past couple of weeks. A vast majority of this number has been just in crypto deposits, likely people moving their funds to ensure they remain on a compliant platform.”
Mudrex’s Edul Patel revealed a 20% jump in active users, demonstrating the positive impact of the FIU’s actions on compliant platforms. Patel also acknowledged the challenges of compliance in the dynamic crypto landscape, stating, “When it comes to compliance, the primary challenge arises from the fact that crypto is a young asset class. This means that regulations are constantly being updated and improved.”
To reinforce trust and encourage users to transition from non-compliant offshore exchanges, CoinDCX allocated a $1 million fund for investors to transfer their holdings to the platform.
While acknowledging the rising costs of compliance, Mudrex’s Edul Patel emphasised the long-term benefits, stating, “As a crypto platform, this can become a game of catch-up. As for the cost of compliance, we are spending 5x of what we used to.” Patel believes that despite increased costs, compliant platforms will attract more investors to the world of crypto investing.
Last month, the FIU issued show cause notices to offshore VDA platforms like Binance and Kucoin for non-compliance with anti-money laundering laws. The Ministry of Electronics and Information Technology (MeitY) subsequently requested the blocking of their websites. This crackdown extends to app stores, with MeitY urging Apple to remove offshore cryptocurrency apps, and the likelihood of the removal of Android versions.
In October of the previous year, the finance ministers and central bank governors of G20 countries adopted a roadmap on crypto assets, emphasising the need for swift implementation. This roadmap, proposed in a synthesis paper by the International Monetary Fund and Financial Stability Board, sets the tone for global regulatory developments in the crypto space.
The recent surge in user registrations, deposits, and activity on compliant Indian crypto platforms underscores the industry’s responsiveness to regulatory actions. Mudrex’s success, alongside initiatives from other platforms, reflects a growing confidence among investors in platforms that prioritise compliance. As the crypto landscape continues to evolve, these developments signal a broader shift towards adherence to regulatory frameworks, emphasising a maturing industry striving for responsible and secure crypto trading.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.