According to an article in Economic Times, Binance cryptocurrency exchange is planning to resume operations in India following a four-month ban by paying a penalty of approximately $2 million for failing to adhere to regulations.
Binance becomes the second foreign cryptocurrency exchange, following KuCoin, to resume operations in India after the country’s financial regulator prohibited access to such platforms due to non-compliance.
In the opening week of January, the Indian Financial Intelligence Unit (FIU) under the Ministry of Finance prevented access to the websites and mobile apps of nine foreign crypto exchanges, including Binance, due to non-compliance with the nation’s Anti-Money Laundering regulations.
Approximately 90% or more of cryptocurrency trades in India were allegedly handled by Binance prior to its prohibition in January this year.
Indian users turned to unregistered foreign crypto exchanges such as Binance in large numbers due to heavy taxes, leading the government to prohibit the use of these unregulated platforms by Indian residents.
Foreign cryptocurrency exchanges such as Binance, with registration from FIU, are now required to follow the same laws and regulations as those based in India.
KuCoin has started a 1% tax deduction at source (TDS) and other foreign crypto exchanges looking to mark an entry into India will have to follow the same.
A knowledgeable source shared with ET that it’s regrettable that Binance didn’t recognize the need for negotiation within two years, and that even a powerful global entity cannot demand preferential treatment at the expense of potentially weakening a nation’s financial infrastructure. (ET Report)
Binance is deeply rooted in India’s crypto market. There were rumors that they purchased the local cryptocurrency platform WazirX back in 2019, but subsequently, Binance denied this acquisition ever took place.
According to Binance, it merely offered wallet services for WazirX as a technological solution. On the other hand, WazirX managed all other exchange functions such as user registration, KYC verification, trading activities, and processing withdrawals.
While KuCoin and Binance have decided to become FIU-registered entities in India, OKX, another leading crypto exchange among the nine blocked crypto exchanges, shut its operations completely, citing the regulatory burden.
CryptoMoon has approached Binance for comment but has yet to hear back.
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2024-04-18 11:10