Kraken's Compliance Yoga: A Contortionist's Guide to Re-Entering India

The crypto exchange Kraken, based in San Francisco, is reportedly dusting off its mat and preparing to attempt another regulatory sun salutation to re-enter the Indian market. To lead this delicate operation, the company has tapped Vishesh Khurana, co-founder of Shiprocket, as its local guide—a man presumably skilled in navigating complex logistical and bureaucratic mazes.

Kraken’s next move involves a mandatory pilgrimage to the halls of Indian authorities, where it will humbly present its application for the necessary licenses. A company spokesperson confirmed the intent to seek official blessings, because operating without them these days tends to attract some rather unfriendly paperwork from the government.

Khurana’s appointment is a classic case of poaching a player who already knows the board. In 2024, he joined Silicon Valley VC firm Tribue Capital to helm its first $250 million India-focused alternative investment fund. He also maintains an advisory role with logistics unicorn Shiprocket and has the angel investor wings to prove it, having sprinkled funding dust on over 50 early-stage startups.

Let’s not forget how Kraken first exited the stage: it was among the cohort of offshore exchanges that got the digital boot from India early last year. The finance ministry served them show-cause notices for playing a little too fast and loose with anti-money laundering laws. The plot thickened later in 2024 when India’s Financial Intelligence Unit decided to play tax collector, seeking to recover a cool $345 million in unpaid Goods and Services Tax from seven foreign exchanges, Kraken included.

To earn its way back into the club, Kraken will now have to perform a flawless compliance routine, particularly under the Prevention of Money Laundering Act. It’s a dance several of its peers, like Binance and KuCoin, have already somewhat mastered, having secured their own clearance cards from the FIU.

Kraken isn’t the only global exchange doing the regulatory limbo in India. Coinbase is also in the ring, having discussions with local authorities to ensure its moves are compliant before it hits the dance floor again. It seems everyone wants a piece of the action, provided they can stomach the tax man’s cut.

Meanwhile, the Indian government continues to refine its rulebook for digital assets with the enthusiasm of a coder optimizing a smart contract. In the Budget 2025 announcement, Finance Minister Nirmala Sitharaman proposed treating “virtual digital assets” as undisclosed income, which basically translates to higher tax rates and more paperwork—building nicely upon the existing 30% crypto income tax and prior AML measures. Fun times.

On a slightly more philosophical note, Economic Affairs Secretary Ajay Seth has admitted that India is reassessing its crypto stance, influenced by the global regulatory winds—specifically citing the U.S.’s own evolving, and often confusing, approach. It seems everyone is watching everyone else, hoping someone else figures it out first.