Binance, one of the world’s largest cryptocurrency exchanges, is poised to make a comeback in India after a four-month ban by agreeing to pay a $2 million fine for non-compliance. This move comes after India’s financial regulatory body, the Financial Intelligence Unit (FIU), blocked access to nine foreign crypto exchanges, including Binance, for failing to adhere to the country’s Anti-Money Laundering Act.
Binance’s return marks the second overseas exchange, following KuCoin, to re-enter the Indian market. Before its ban in January, Binance reportedly accounted for over 90% of Indian crypto trading volume.
Indian users turned to foreign exchanges like Binance to evade heavy tax burdens, prompting the government to ban unregistered overseas exchanges. With FIU registration, foreign exchanges must comply with the same regulations as Indian exchanges, including implementing a 1% tax deduction at source (TDS).
Despite its long history in India, including its alleged acquisition of local exchange WazirX in 2019, Binance has faced regulatory challenges. The exchange claimed it only provided wallet services for WazirX and was not responsible for other aspects of the exchange. Meanwhile, OKX, another blocked exchange, opted to shut down operations entirely due to regulatory burdens.
The return of Binance and KuCoin signifies a significant development in India’s crypto landscape, as regulatory compliance becomes paramount for foreign exchanges seeking access to the Indian market.
