Binance Returns to India as FIU-Registered Post $2M Penalty

Binance, the world’s largest cryptocurrency exchange, is planning to re-enter the Indian market after facing a ban earlier this year.

The largest cryptocurrency exchange in the world, Binance, is preparing to re-enter the Indian market after the Indian government initially prohibited it earlier this year.

Binance To Re-enter India Market After Ban

The re-entry approach that Binance will implement would reportedly involve the payment of a penalty of about $2 million, according to sources that are familiar with the subject.

The exchange intends to register as an entity with the Financial Intelligence Unit (FIU) of the Ministry of Finance, demonstrating its commitment to adhering to Indian laws and regulations.

This move, within the context of the Indian cryptocurrency landscape, highlights Binance’s recognition of the importance of regulatory compliance.

This is especially significant in light of the country’s stringent regulatory framework, which includes the Prevention of Money Laundering Act (PMLA) and the Virtual Digital Assets (VDA) taxation framework.

Regulatory Compliance and Tax Implications

Binance commanded a commanding presence in the Indian cryptocurrency industry, accounting for roughly 90% of the estimated $4 billion worth of cryptocurrency assets in the nation, even before its ban.

On the other hand, investors were able to engage in trading operations without having to pay the 1% tax deducted at source (TDS) that is payable on registered exchanges because the exchange did not comply with the tax regulations.

Indian cryptocurrency investors made a big behavioral adjustment as a result of the ban, moving their assets to local exchanges such as CoinDCX and WazirX.

Because of this movement, several platforms experienced significant increases in their user bases. Furthermore, research indicates that global cryptocurrency exchanges operating without a registered organization in India have contributed to significant tax leakage, estimated to be close to three billion rupees annually.

The fact that Binance has made the choice to comply with Indian laws and regulations is widely considered a positive development for the cryptocurrency business in India.

This decision reflects a significant strategic shift involving Binance. Market watchers believe that Binance’s re-entry into the Indian market could have significant implications for market dynamics.

This is due to the fact that the exchange possesses superior technology and higher liquidity in comparison to domestic exchanges. Furthermore, Binance has detailed ambitious goals for its restored presence in India.

These objectives include the launch of locally tailored payment options, the creation of a dedicated India team, and additional investments in the nation’s blockchain ecosystem.

This action is in line with broader global trends, as financial regulators in nations such as the United States of America, the United Kingdom and Hong Kong are progressively acknowledging the value of cryptocurrencies and granting permission for the trading of crypto-backed assets on traditional financial markets.