Binance to Restart Operations in India After Paying a $2 Million Fine
The world's largest cryptocurrency exchange, Binance, is making a comeback to India’s crypto market after an absence of 3 months. The crypto exchange was banned by the government in January, but it still sees India as a promising market.
According to a news report by the Economic Times of India, Binance is set to pay a penalty of approximately $2 million and plans to restart operations in India as an entity registered with the finance ministry's Financial Intelligence Unit (FIU).
🚨BREAKING : #Binance Set to Return to India🇮🇳,paying $2 million fine.
According to The Economic Times, #Binance to Resume Operations in India🇮🇳,Agrees to $2 Million Fine and Regulatory Compliance pic.twitter.com/VA5Y6EZD7B
In March 2023, the Finance Ministry of India announced that crypto firms operating in the country must register with the Financial Intelligence Unit (FIU).
The FIU of the finance ministry is tasked with overseeing the trade in virtual digital assets (VDA) and ensuring each entity complies with the various provisions of the Prevention of Money Laundering Act (PMLA) and taxation framework.
As many as 28 virtual digital assets (VDA) or crypto service providers registered themselves before the end of 2023. None of the 28 VDA providers appear to be offshore companies.
In December 2023, FIU issued show-cause notices to offshore cryptocurrency platforms, including Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, and after failure to respond, the India Secretary, Ministry of Electronics and Information Technology, was directed to block the URLs and mobile application access of the crypto providers operating illegally.
Per the report, Binance has taken steps to restore Indian access to its mobile application and website in the last few months. However, the Indian government has rejected the request until the company implements the necessary compliance.
Binance is re-entering the market and is set to become the second offshore exchange to register in India after Kucoin. Kucoin announced its return to India last month, with its URL lifted after fulfilling compliance with FIU regulations. This is coming at a time when popular currencies such as bitcoin and ethereum are rising to all-time highs.
While Binance has faced regulatory challenges in Europe and the U.S., it keeps finding it easy to expand into bigger markets across the world. This shows the company's resilience and adaptability.
According to chainalysis In the 2023 Global Crypto Adoption Index, India topped the rankings for overall use of crypto, with the majority using centralized exchanges like Binance and OKex for decentralized finance.
Before the ban, Binance provided services for over 90% of Indian cryptocurrency investors’ estimated $4 billion, allowing investors to trade without paying the 1% tax deducted at source (TDS).
With the rise of the cryptocurrency market globally, the U.S. leads the top-largest crypto market in the world by raw estimated transaction volume, and impressively, India is the second largest, with transactions pegged at over $260 billion.
India has emerged as a top cryptocurrency market in spite of a challenging regulatory and tax environment for crypto providers. We are watching closely to see how Binance will navigate through the country’s tough crypto stance.
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