The Indian government originally outlawed Binance, but now it is poised to return after agreeing to pay a hefty fine of about $2 million.
The largest cryptocurrency exchange in the world is reportedly getting ready to reenter the Indian market, with the Financial Intelligence Unit (FIU) of the finance ministry serving as its watchdog. This information was reported by ET.
Binance's Return to India
Due to the most recent development, Binance will now need to abide by the current legal frameworks, such as the Virtual Digital Assets Taxation Framework and the Prevention of Money Laundering Act (PMLA) (VDA).
According to a person with knowledge of the situation,
"It is regrettable that Binance took over two years to acknowledge that negotiations are out of the question and that no major international player can demand preferential treatment, particularly at the expense of putting the nation's financial system at risk."
After facing criticism for not following these restrictions strictly, Binance now seems committed to staying inside the legal bounds of the Indian cryptocurrency market.
Binance has now moved in the same direction as KuCoin, which recently declared that its compliance with the FIU was complete. The exchange, which has its headquarters in Seychelles, has announced that it will begin withholding 1% TDS from each bitcoin transaction that consumers commence on its website.
An Attempt by Binance With India
Previously, Binance controlled a substantial portion of the estimated $4 billion in cryptocurrency holdings among Indian citizens, accounting for 90% of the market.
Following the July 2022 implementation of the 1% TDS on cryptocurrency trading by government officials, Indian exchanges witnessed a roughly 90% drop in trading volume. Traders instead went to cryptocurrency exchanges that operate offshore, like Binance.
Changpeng Zhao (CZ), the founder and former CEO of Binance, stated later that year that the exchange has no plans to grow into India because of the country's high taxation regime. He did admit, though, that Indian citizens could still use Binance's services.
This changed towards the end of 2023 when nine exchanges (Binance, Huobi, Kraken, Bitstamp, MEXC Global, Bitfinex, Kucoin, Bittrex, Gate.io) received a show cause notice from the FBI for operating illegally in the nation. Following this, Google and Apple removed these apps from the Play Store and App Store platforms in India after the FIU advised the Ministry of Electronics and Information Technology to restrict access to the exchanges' websites.
The Ministry of Finance has made it clear that physical operations in India are not necessary to fulfill registration and compliance obligations. All organizations that transact virtual assets are subject to regulatory requirements, including PMLA record-keeping and reporting.
April 2024, Cryptoniteuae