Layer 2 sidechain Polygon requires extensive KYC (Know Your Customer) disclosures to provide financing, investment, grants or financial support to potential partners in India, a person familiar with the matter said.
- Polygon, whose system runs alongside the Ethereum blockchain, wants to be "extremely compliant" at a time when regulators are looking more closely, according to the person.
- The person said that "there would be no grants for anyone who is not willing to share full KYC details."
- "Anyone who is legitimate should not hesitate to share KYC details to avoid procedural delays. This is a requirement for the future," the person added.
- Developers in India have recently spoken about the difficulty of getting funding or investment from Polygon, going so far as to say Polygon has stopped funding projects in the country altogether, another industry source said.
- However, the source, who is familiar with Polygon's decision, clarified that it was not a complete cessation of funding for Indian projects, but rather increased government scrutiny.
- Recent anti-crypto measures by Indian authorities have included the introduction of a strict new crypto tax, the cutting off of payment processors from local exchanges after the bumpy launch of crypto exchange Coinbase (COIN), the failure to support the industry after a slump in trading volumes, and the introduction of a new crypto tax - a 1% withholding tax to be introduced on July 1.