Binance, a leading global cryptocurrency exchange, has received approval from the Indian Financial Intelligence Unit (FIU) to resume operations in India, marking a significant development in the country’s crypto landscape.
The FIU’s recent approval grants Binance the regulatory green light to offer its services in India, making it the second offshore exchange to receive such recognition after KuCoin. Vivek Agarwal, the head of FIU, confirmed that Binance is now a registered entity, signaling a positive step towards regulatory compliance.
Binance, along with KuCoin and several other foreign exchanges, was issued a notice of noncompliance by Indian authorities in December 2023. Subsequently, in January 2024, the Indian Finance Ministry instructed its IT department to block access to URLs and mobile applications associated with banned crypto platforms.
In response to the regulatory crackdown, Binance and KuCoin, among others, engaged with Indian regulatory bodies to obtain FIU compliance and resume operations in the country. While Binance and KuCoin successfully navigated the regulatory landscape, platforms like OKX and BitStamp ceased their services in India.
The FIU registration approval comes amidst reports that Binance is set to return to India after reportedly agreeing to pay a $2 million fine for noncompliance. The move signifies Binance’s commitment to re-entering the Indian market and catering to the needs of Indian crypto enthusiasts.
India, once a vibrant crypto market, has faced challenges due to stringent tax regulations and regulatory ambiguity. The imposition of a 30% tax on crypto gains and a 1% tax deduction at source on crypto transactions prompted many Indian investors to seek refuge on foreign exchanges, with Binance commanding a significant portion of the trading volume.
Despite the hurdles, India remains an attractive market for crypto exchanges, albeit with obstacles such as banking limitations and regulatory uncertainty. While some crypto businesses have relocated overseas, others persevere in navigating the evolving regulatory landscape.