Polygon increases KYC scrutiny for investments and grants in India

Web3 startup Polygon has introduced more stringent KYC requirements for its investments in the crypto space, as a result of increased regulatory scrutiny in India

Polygon increases KYC scrutiny for investments and grants in India

Wednesday June 01, 2022,

2 min Read

Polygon, the Web3 startup that issues the Matic cryptocurrency, has changed its internal policy for approving investments and grants in India. According to reports, the company is following more stringent KYC (know-your-customer) rules to identify all recipients of funds.

As reported by CoinDesk, Polygon is aiming to be "extremely compliant" in its investments according to a source. This development comes in the wake of the Indian government's seeming crackdown on the cryptocurrency ecosystem.

After-tax rules were introduced during the Budget session in February, including a 30 percent capital gains tax and a 1 percent TDS on all crypto trades, there was initial excitement that the country was leaning towards legalising the ecosystem.

However, after American cryptocurrency exchange Coinbase's aborted launch in April, local exchanges have been struggling to find fiat currency liquidity partners as banks have deserted them amidst unclear regulations and notices from the RBI and NPCI.

According to the source familiar with Polygon, apparently the company will be going above and beyond to ensure legal compliance considering this uncertain environment. The person told CoinDesk, "Anybody legit should not be reluctant to share KYC details and therefore to avoid procedural delays. It's a requirement going forward."

Web3 developers in the country have reportedly claimed that is almost impossible to raise funding from Polygon anymore, according to the same report.

Edited by Anju Narayanan