Binance Secures Regulatory Approval from India's Financial Intelligence Unit
Summary:
The Financial Intelligence Unit (FIU) of India has approved Binance, a leading global cryptocurrency exchange, to operate in the country. Binance became the second foreign exchange to secure regulatory approval after KuCoin. Post non-compliance notices in 2023, Binance and KuCoin were among exchanges that worked to secure FIU compliance. After paying a hefty fine, Binance is making a return, while others, like OKX and BitStamp, have ended operations in India. Following a stringent tax regime, Indian investors switched to foreign exchanges for trading, causing a significant shift in the Indian crypto market.
The Financial Intelligence Unit (FIU) of India has given the green light to Binance, a global cryptocurrency exchange, making it the second foreign exchange, after KuCoin, to receive regulatory approval. Vivek Agarwal, the leader of the FIU, mentioned in an article on CoinDesk that Binance is now registered officially. Both Binance and KuCoin were among the variety of offshore crypto exchanges that received non-compliance notifications in December 2023. Following the notice, by mid-January 2024, the Ministry of Finance instructed the IT department to hinder the URLs and mobile applications' access of the outlawed crypto platforms in the country.
Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, besides Binance and KuCoin, were served with the same regulatory notice. Subsequent to the prohibition, several exchanges began collaborating with the Indian regulator to secure the FIU compliance and provide their services to Indian clients. While Binance and KuCoin made their comeback, other platforms like OKX and BitStamp discontinued their operations in India.
Reports of Binance acquiring FIU registration emerged today. Cointelegraph had predicted Binance's return to the Indian market in late April, after paying a hefty $2 million fine for noncompliance. When the Indian government declared a steep 30% tax on crypto proceeds and a 1% tax markdown at the source for each transaction, Indian investors shifted their trading to foreign exchanges to evade the new tax system, with Binance reportedly handling 90% of Indian's crypto trade volume.
Even though India was once a hotspot for crypto activities with an influx of major exchanges eyeing the market, its stance has since chilled owing to stern tax regulations and ambiguous regulatory environment. A significant segment of crypto traders and ventures focused on cryptos have relocated abroad, and the remaining exchanges in the country are grappling with earning the trust of investors due to a lack of banking services.
Binance and the FIU did not respond to Cointelegraph's request for comments at the time this news went to press.
Published At
5/10/2024 4:41:07 PM
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