India’s InsuranceDekho, a leading insurance tech company, has raised an impressive $150 million in funding despite a slump in the market. This development comes as a surprise, given the current state of the market and the recent crackdown on crypto exchanges in India.
The company’s success is a testament to the growing demand for insurance technology in the country. However, it also highlights the challenges faced by the Indian market, particularly in the area of web3.
Recently, several global crypto exchanges, including Binance, have been banned in India for allegedly operating illegally. This has caused disruptions in the market and has led to the removal of their apps from the Google Play Store. Moreover, various internet service providers and telecom networks have started blocking the URLs of these exchanges.
The Financial Intelligence Unit (FIU), a government agency responsible for monitoring financial transactions, has issued show cause notices to nine crypto firms for non-compliance with India’s anti-money laundering rules. As a result, the Indian government has taken steps to block these exchanges and has asked the IT Ministry to block their websites.
In light of these developments, Indian crypto traders have turned to global platforms with less stringent regulations, resulting in a decline in trading activity on domestic exchanges. This has also led to a rise in tax avoidance, with traders migrating to platforms with less rigorous identification verification processes.
In response to this, the cofounder and CEO of CoinSwitch, a popular Indian exchange, has called for offshore exchanges to comply with India’s regulations and register with the FIU-IND for consumer protection and regulatory oversight.
India has always taken a strong stance against cryptocurrencies, with the Reserve Bank banning them five years ago. While the ban was overturned by the Supreme Court in 2020, the central bank and top officials continue to advocate for the outlawing of crypto, comparing it to a Ponzi scheme.
Despite these challenges, the success of InsuranceDekho shows the potential for growth in India’s insurance tech industry. However, it also highlights the need for regulatory clarity and compliance in the web3 industry to ensure the protection of consumers and the development of a healthy market.