Global cryptocurrency exchange Binance has registered with India’s virtual digital asset monitoring agency, FIU-IND, after paying a penalty of Rs 18.82 crore, lifting the seven-month ban on its website and mobile application in India.
Binance 19th Global Milestone for Exchange
Binance’s registration with the Financial Intelligence Unit – FIU-IND – is its 19th global regulatory milestone, the company said in a statement on Thursday.
With this alignment with Indian regulations, fully recognizing the vitality and potential of the Indian VDA market, we can finally adapt our services for Indian users, said Richard Teng, the chief executive of Binance. It is a privilege to extend the reach of our state-of-the-art platform to this thriving market in support of India’s continued VDA evolution.
It said Binance cited that, according to Chainalysis’ 2023 Global Crypto Adoption Index, India leads in grassroots crypto adoption. By estimated transaction volume, the country ranked in the top five across both centralized and decentralized exchanges, lending protocols, and token smart contracts.
Fine for Non-Compliance with Anti-Money Laundering Laws
In June, FIU-IND fined Binance Rs 18.82 crore, citing non-compliance with the country’s anti-money laundering law. This is the highest penalty India has imposed on a crypto entity so far.
In December 2023, the intelligence unit of the finance ministry, vested with ensuring that trade in VDAs is policed, issued notices to Binance and eight other global crypto exchanges, warning that their operations in the country were non-compliant with the local laws and seeking their response. In January, they were banned from operating in India through web addresses and mobile applications.
The agency said in a notice dated June 19 that, based on material available on record and after considering Binance’s written and oral submissions, the Director, FIU-IND, found that the charges against the said notice were substantiated. The penalty was imposed under the provisions of the Prevention of Money Laundering Act.
Offshore exchange KuCoin paid a fine of Rs 35.5 lakh earlier this year for past non-compliances, FIU-IND said last month. Among other crypto entities, Bitstamp and OKX have wound up operations in India, while Gate.io and Kraken are still in discussions with the FIU. The rest have not responded to the notices.
ET had reported in April that Binance was set to re-enter the country by paying a fine of around $2 million (around Rs 16.7 crore at current exchange rates).
Binance Was Leading In Indian Crypto Market Before The Ban
It is the world’s largest crypto exchange in terms of asset holdings and daily trade volume. According to CoinMarketCap, it recorded a trade volume of $11 billion in the 24 hours until noon Thursday, 25% of the global volume.
Before it was banned in January this year, Binance accounted for nearly 90% of the estimated $4 billion crypto holdings of Indian nationals.
In fact, Binance’s return to India will be bittersweet for local crypto exchanges. During the last couple of years, all of them have been facing a decrease in trading volumes due to regulatory uncertainty, volatility of token prices, the 30 percent tax levied on income coming from crypto, and the 1 percent TDS added on every crypto transaction of Rs 10,000 in India.
This has caused users or retail investors to shift to globally registered but locally unregistered exchanges to avoid taxes. Binance had benefited most from this in terms of gaining users. But now, with local registration, exchanges like Binance and KuCoin will also come under the ambit of Indian regulations, and investors will have to pay high taxes.
Conclusion
It marks seven months since the world’s leading crypto exchange, Binance, was banned, and now, it has its return to the Indian market-a feat accomplished by its registration with India’s financial watchdog, FIU-IND, and a heavy penalty of Rs 18.82 crore against them for non-compliance with anti-money laundering laws.
