Binance Secures FIU Approval for Return to India
Global cryptocurrency exchange Binance has successfully obtained approval from India’s Financial Intelligence Unit (FIU) to resume its services in the country, CoinDesk reports. This development follows a period of regulatory scrutiny and a ban on several offshore crypto exchanges, including Binance and KuCoin, in December 2023.
The FIU approval positions Binance as the second off-shore crypto exchange to receive regulatory clearance after KuCoin. Vivek Agarwal, the head of FIU, confirmed that Binance is now a registered entity in India.
In December 2023, Binance, KuCoin, and several other platforms faced noncompliance notices from Indian regulators, leading to a ban in January 2024. However, both Binance and KuCoin initiated efforts to regain compliance and resume operations in India. While KuCoin has paid a penalty of $41,000 and resumed its services, Binance awaits a penalty decision following a hearing with the FIU.
The regulatory landscape in India has been challenging for crypto exchanges, with stringent tax policies and regulatory uncertainties driving investors to offshore platforms. At its peak, Binance reportedly accounted for 90% of the total trading volume from India. However, the imposition of a 30% tax on crypto gains and a 1% tax deduction on transactions compelled many Indian investors to seek alternatives.
Despite the thriving crypto market in India, regulatory hurdles and lack of clarity have prompted a significant portion of traders and businesses to shift overseas. Local exchanges also struggle to gain investor trust due to banking limitations.
Binance’s return to India signifies a shift in regulatory dynamics and highlights the growing importance of compliance in the crypto industry. While the exchange navigates the compliance process, negotiations with regulators continue for other sanctioned platforms like Kraken, Gemini, and Gate.io. Additionally, OKX and Bitstamp have submitted plans to exit the Indian market.
India’s stance on crypto remains uncertain, with the government prioritizing global consensus on regulation without implementing domestic legislation. The country’s crypto bill has been on hold since 2021, indicating that a decision may not be reached before mid-2025.
