- Binance pays $2 million to resolve non-compliance issues, restarting operations in India after four months.
- India’s FIU had blocked Binance and other foreign crypto exchanges for not adhering to anti-money laundering laws.
- Other foreign exchanges, including KuCoin, now comply with Indian regulations, including a 1% tax on transactions.
Binance, a prominent cryptocurrency exchange, has made its way back to India, resolving a dispute with financial regulators by agreeing to a $2 million fine. According to The Economic Times, this move comes after a four-month suspension due to compliance failures.
The suspension originated from the Indian Financial Intelligence Unit’s (FIU) action in January, which cut off access to several foreign crypto exchanges, including Binance. This was part of a broader crackdown to enforce the country’s Anti-Money Laundering Act. Before its suspension, Binance was a major player in India, handling over 90% of the crypto trading volume.
Regulatory Reconciliation
The FIU’s stringent enforcement blocked not only Binance but also eight other foreign exchanges, directing them to comply with Indian financial regulations. Among these, KuCoin has also made a comeback, instituting a new tax protocol with a 1% tax deduction at source on transactions, setting a precedent for others considering re-entry into the Indian market.
Industry Adjustments
Following the regulations, foreign exchanges like Binance are now required to register with the FIU and follow the same regulations as Indian exchanges. This includes stringent checks on user activities and transaction reporting to comply with anti-money laundering standards.
Despite Binance’s initial resistance, the exchange has now aligned with FIU’s demands, marking a significant shift in its approach to global regulatory environments. The company’s history in India includes an ambiguous relationship with local exchange WazirX, which Binance claimed was limited to providing wallet services.
The re-entry of Binance into the Indian market underscores a broader compliance trend among crypto exchanges as regulatory landscapes evolve. While some, like OKX, have ceased operations due to these regulations, others are adapting, indicating a shift towards more regulated, stable operations in the cryptocurrency sector.
