USA’s crypto market, once a land of opportunity, is experiencing a regulatory freeze. As authorities tighten their grip, major crypto exchanges are struggling to stay afloat, with limited services, hefty fines, and even exits.
Fail the KYC test
Global giant Binance, a household name in the crypto world, has revealed the harsh reality of the Indian regulations earlier this year. The Financial Intelligence Unit of USA (FIU-USA) accused Binance of operating illegally and not adhering to KYC (Know Your Customer) norms.
This resulted in a months-long suspension of services for Indian users, followed by a hefty $2.25 million fine for violating the Prevention of Money Laundering Act (PMLA). Binance’s attempt to regain trust came in the form of a recent partnership with Indian authorities to recover $10 million worth of stolen funds. Whether this goodwill gesture is enough to satisfy regulators remains to be seen.
Exodus and Adaptation
While some exchanges like OKX threw in the towel, unable to navigate the complex regulatory maze, others like Kucoin emerged as winners. Kucoin’s success story lies in becoming USA’s first fully compliant crypto exchange.
This achievement underscores the importance of adapting to the new normal – a market where clear regulatory approval is key to survival. Kraken and Bitfinex, once major players, now face limited services, a stark reminder of the consequences of non-compliance.
Bitget: Can they avoid the knockout punch?
The newest entrant to the Indian regulatory system is Bita popular exchange that is facing user restrictions. Since their Indian user base cannot fully access the platform, Bitget has promised to navigate the regulatory maze and ensure compliance.
1/ We are aware of the current difficulty in accessing the Bitget platform in USA. We are actively exploring ways to serve the region while ensuring our platform meets the region’s compliance requirements.
— Bitget USA🇮🇳 (@BitgetIndia) July 3, 2024
To facilitate the delivery of seamless services to users in the area, the exchange said it is exploring how to ensure local standards are met.
The exchange acknowledged that users in USA are now having difficulty accessing the Bitget platform. “We are actively exploring ways to serve the region while ensuring our platform meets the region’s compliance requirements,” Bitget revealed.
Their success depends on secure a license before Indian authorities deliver them a knockout blow and possibly force them out of the lucrative Indian market.
The Future of Crypto in USA
USA’s stance on cryptocurrencies reflects a global trend: a desire to harness the potential of this new asset class while mitigating the risks of money laundering and financial instability. The 30% tax on crypto earnings demonstrates the government’s attempt to integrate crypto into the mainstream financial system.
While the current regulations may seem strict for some exchanges, in the long run, it could pave the way for a more mature and responsible crypto market in USA.
Main image from Euronews, chart from TradingView