Binance, the world’s largest crypto exchange by trading volume, is looking to return to India after a four-month ban by paying a penalty of $2 million for non-compliance.
Binance’s Return To India
In early January, Binance and other foreign cryptocurrency exchanges were booted from the Apple Store in India weeks after India’s Financial Intelligence Unit (FIU) issued notices to them for illegally operating in the country. Besides Binance, Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex, and Bitfinex were the other exchanges that received the FIU compliance notice at the time.
Binance comprised over 90% of Indian crypto trading volumes, estimated at $4 billion, before being slapped with the ban. The exchange’s dominance was attributed to its non-compliance with local tax laws, which enable locals to trade cryptocurrencies without paying 1% tax deducted at source, according to a report from The Economic Times.
Indian customers flocked in droves to overseas exchanges like Binance to circumvent the harsh tax impositions, which thus pushed the government to prohibit such exchanges not registered with the Financial Intelligence Unit.
Now, Binance has indicated its intention to pay a $2 million fine to settle the compliance failings. After paying the fine, Binance will resume operations in the world’s most populous country as an FIU-compliant company. Binance also aims to comply with all regulations, including local money laundering and taxation laws.
An anonymous individual privy to the matter told The Economic Times that it is “unfortunate that it took (Binance) more than two years to realize there is no room for negotiations, and (that) no global powerhouse can command special treatment, especially at the cost of exposing the country’s financial system to vulnerabilities.”
Binance becomes the second global exchange after KuCoin to return to India after the ban. Although Binance and KuCoin have decided to become FIU-registered firms in India, OKX, another foreign crypto exchange whose website and app were blocked in the country, has ended its services completely, citing local regulatory hurdles.
