India has been blocking non-compliant crypto firms since February this year
Photo Credit: Bloomberg
India, in a bid to ensure that the crypto sector is safe for investors, has been tightening the noose around crypto players. Now, KuCoin has become the latest international crypto exchange to have completed compliance with India's Financial Intelligence Unit (FIU). In February, the government of India had issued an alert to all crypto players to bring their respective businesses under India's legally compliance framework to be able to keep their operations up and running.
In an official update posted on X, the Seychelles-headquartered crypto exchange confirmed that it will now begin deducting one percent TDS on each crypto transaction that users trigger through its platform.
“Become an affiliate today and be part of the revolution. Join us as KuCoin pioneers compliant crypto trading in India,” the exchange wrote in its announcement post on X.
The tax deduction process on KuCoin for Indian investors and traders will begin on April 10. The TDS collected by the exchange will be deposited to India's financial authorities. One percent tax will be deducted on crypto transactions that include trading activities, selling crypto assets, obtaining crypto assets, depositing them in wallets, purchasing NFTs, and more.
This TDS deduction rule was implemented by the Indian government in 2022. The ministry of finance wanted to keep a track of the crypto transactions, most of which are largely anonymous.
Members of India's crypto community have time and again urged the Indian finance ministry to revise this TDS law. The community wishes that instead of one percent, the government reduce it to 0.01 percent. Despite the outcry, the government has not introduced any changes to this one percent TDS rule up until now.
As far as KuCoin is concerned, it is only natural that the exchange took brisk steps to align its operations with India's compliance criteria to continue its operations here after facing legal obstacles in the US recently.
Earlier in March, US prosecutors charged the exchange and two of its founders for failing to comply with American anti-money laundering rules. As per US Attorney Damian Williams, the exchange received more than $5 billion (roughly Rs. 41,619 crore) and sent over $4 billion (roughly Rs. 33,295 crore) of suspicious and criminal funds.
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