How Technologically Adept Investors Are Circumventing Government Restrictions on Cryptocurrencies
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New Delhi: The Indian Ministry of Electronics and Information Technology is still exploring strategies to prevent local users of cryptocurrencies from using VPNs to access international exchanges. On January 12th, the government blocked several major crypto exchanges, including Binance and Kucoin, from both websites and app stores.
India’s Meity continues to seek methods to disrupt the use of VPNs by residents for the purpose of trading on cryptocurrency platforms abroad, following their decision to restrict access to various exchanges such as Binance and Kucoin on January 12th from within the country.
“Despite the ubiquity of VPNs for accessing international crypto services, we are looking for solutions,” stated Meity secretary S. Krishnan. “It’s less about implementing regulatory barriers and more about developing a technological response to effectively block such platforms.”
“We acknowledge the challenge presented by VPNs for accessing foreign crypto markets and are in search of appropriate interventions,” declared Meity secretary S. Krishnan. “Tackling this issue calls for a technological rather than a purely regulatory fix to efficiently block these exchanges.”
Adept traders are undeterred by IP restrictions; they are resourceful in bypassing such obstacles primarily due to the benefits of international exchanges, such as higher liquidity and the ability to avoid the 1% TDS applicable on Indian platforms.
Moreover, the recent blocking of global crypto exchange IPs has hindered the slight revival witnessed on domestic platforms—further highlighting the need to address the usage of VPNs.
Despite a significant uptrend in the US crypto market, Indian exchanges may not record high volumes given that users have the option to transact with leading global exchanges, skipping domestic options.
Due to non-compliance with the Prevention of Money Laundering Act (PMLA), 2002, the FIU recommended the restriction of international crypto exchanges, a move that has consequently boosted Indian exchanges to some extent.
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