Binance, a popular crypto exchange, is preparing to resume operations in India. The exchange faced a four-month ban due to non-compliance with regulations. According to The Economic Times, Binance will pay a $2-million fine to return to the Indian market.
India’s Crypto Exchange Landscape
India’s financial regulatory body previously blocked access to several foreign crypto exchanges, including Binance, for failing to comply with the country’s laws. Binance will be the second overseas exchange to make a comeback after KuCoin.
The Indian Ministry of Finance’s Financial Intelligence Unit (FIU) took action against nine foreign crypto exchanges in January. These exchanges were found to be non-compliant with the Anti-Money Laundering Act.
Impact of Binance’s Ban
Binance was a dominant player in the Indian crypto market, accounting for over 90% of trading volume before the ban. Indian users turned to foreign exchanges like Binance to avoid heavy taxes, prompting the government to take action.
Foreign exchanges like Binance, upon returning to India, must adhere to the same rules and regulations as Indian exchanges. KuCoin has already implemented a 1% tax deduction at source (TDS), setting a precedent for others.
A source told The Economic Times that it’s regrettable that Binance took over two years to recognize the importance of compliance. They stressed that no global powerhouse can expect special treatment, especially at the risk of exposing the country’s financial system.
Binance’s Presence in India
Binance has had a significant presence in India, although its acquisition of local exchange WazirX in 2019 was disputed. Binance claimed it only provided technical support, while WazirX managed all other aspects of the exchange.
While Binance and KuCoin are working towards compliance, OKX, another blocked exchange, has ceased operations in India due to regulatory concerns. The actions of these exchanges reflect the evolving landscape of crypto regulation in India.
