As a researcher with a background in the cryptocurrency industry, I’m pleased to see that Binance has obtained approval from the Indian Financial Intelligence Unit (FIU) to offer its services in India. This news comes after several crypto exchanges received a notice of noncompliance from the Indian regulatory body, leading to a mass exodus of Indian investors to foreign platforms to bypass the tax regime.
Binance, a renowned global cryptocurrency exchange, has secured authorization from the Indian Financial Intelligence Unit (FIU) to provide its services within India.
Binance has recently earned the approval to become the second offshore cryptocurrency exchange to receive regulatory consent, following in the footsteps of KuCoin.
As a researcher, I’ve come across a noteworthy development in the cryptocurrency sphere. Based on a recent report from CoinDesk, Vivek Agarwal, who leads the Financial Industries Regulatory Authority (FIU), announced that Binance has officially registered as a legal entity.
In late December 2023, over a dozen international cryptocurrency exchanges, including Binance and KuCoin, were issued noncompliance notices by the Indian Finance Ministry. Within two weeks of receiving these notices, the ministry ordered its IT department to restrict access to the URLs and mobile applications of these banned crypto platforms in India, effective mid-January 2024.
In addition to Binance and KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex are among the other exchanges that have been issued regulatory notices.
After the regulation came into effect, some cryptocurrency platforms chose to cooperate with India’s regulatory body to meet Financial Intelligence Unit (FIU) requirements and serve Indian users again. For instance, KuCoin and Binance successfully navigated this path. In contrast, OKX and BitStamp decided to withdraw their services from the Indian market.
The FIU registration reports emerged today, but CryptoMoon announced around the third week of April that Binance was probable to come back to India following the payment of a $2 million penalty for not adhering to regulations.
Following India’s imposition of a substantial 30% tax on cryptocurrency gains and a 1% tax deducted at source for every crypto transaction, many Indian investors sought refuge in international crypto exchanges to circumvent the tax system. At its zenith, Binance reportedly handled approximately 90% of the total trading volume originating from India.
In spite of a vibrant cryptocurrency market and many major crypto exchanges looking to establish a presence there, India has seen a decrease in interest on the crypto radar due to harsh taxations and regulatory ambiguity. Many crypto traders and businesses have relocated abroad, while those local exchanges that have persisted face challenges in gaining investor confidence due to limited banking services.
As a cryptocurrency analyst, I attempted to contact both Binance and the Financial Investigation Unit (FIU) regarding recent inquiries. However, at the time of publishing this analysis, I have not received any responses from either party.
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2024-05-10 17:01