India Cracks Down on Nine Crypto Exchanges: What RBI Governor Warns About Cryptocurrency Risks
India Cracks Down on Nine Crypto Exchanges: What RBI Governor Warns About Cryptocurrency Risks

 RBI Governor Shaktikanta Das Issues Cryptocurrency Warning at Davos - Investors in India's cryptocurrency boom are receiving a stern caution from Reserve Bank of India (RBI) Governor Shaktikanta Das. Speaking at the World Economic Forum in Davos, Das warned about the potential dangers posed by these digital assets, which he described as "instruments with no underlying value." Despite the recent surge in global cryptocurrency valuations, Das emphasized that India's regulatory approach would be distinct and not a mere imitation of decisions made by other countries.

Das's warning comes in the midst of celebration among cryptocurrency investors in India, who have witnessed a notable increase in values. The RBI Governor referred to the current crypto "party" as not without risks, underlining concerns about the harm these assets could inflict on emerging market economies like India. His remarks followed the recent approval of bitcoin exchange-traded funds by the US Securities and Exchange Commission (SEC). Contrary to the optimism surrounding the cryptocurrency market, Das asserted, "While others might see a renewed cryptocurrency party, we see significant risks." He highlighted the responsibility of each nation's regulatory decisions, stating, "They (the US SEC) are responsible for their nation's well-being, and we for ours."

This isn't the first time Das has expressed reservations about cryptocurrencies. Consistently warning about their potential impact on financial stability and the risk of a global financial crisis, Das responded to a query about crypto's future in India with a succinct "very bad," before elaborating on the associated concerns. "Some celebrate this as a new party, but they forget the crash a few years ago. Volatility, money laundering, and terror financing risks are inherent in these assets," he explained.

Shifting the focus to India's economic landscape, Das acknowledged the challenge of food inflation, attributing its volatility to global supply chain disruptions and unpredictable weather events. Despite significant spikes in food prices contributing to inflation surpassing the RBI's 4% target, Das reassured that the central bank remains vigilant in addressing these fluctuations caused by heavy rains and floods affecting vegetable prices.

In a related development, India has taken action against nine crypto exchanges, including major players like Binance, Kucoin, and Huobi. The Financial Intelligence Unit (FIU), under the Finance Ministry, issued a show cause notice for alleged non-compliance with Indian anti-money laundering laws. The Ministry of Electronics and Information Technology (MeitY) has been asked to block the URLs of these exchanges in India, as they are deemed to be operating illegally. The exchanges receiving the notice include Binance, Kucoin, Huobi, Kraken,, Bittrex, Bitstamp, MEXC Global, and Bitfenex.

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