Binance crypto exchange is set to return to India after a four-month ban by paying a $2m fine for non-compliance, according to a report published in The Economic Times.
Binance and nine foreign crypto exchanges were blocked in India over non-compliance with local AML regulations.
Binance will be the second overseas exchange after KuCoin to mark a return to the country after India’s financial regulatory body blocked access to crypto exchanges for non-compliance.
The Indian Ministry of Finance’s Financial Intelligence Unit (FIU) blocked access to nine foreign crypto exchange’s URLs and mobile applications, including Binance, in the first week of January for failing to adhere to the country’s Anti-Money Laundering Act.
Binance reportedly accounted for more than 90% of Indian crypto trading volume before its ban in January earlier this year.
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Indian users flocked to foreign crypto exchanges like Binance to bypass the severe tax impositions, which prompted the government to ban overseas exchanges not registered with FIU.
Now, with FIU registration, foreign crypto exchanges like Binance have to adhere to the same rules and regulations as Indian exchanges.
KuCoin has started a 1% tax deduction at source (TDS), and other foreign crypto exchanges looking to mark an entry into India will have to follow the same.
A person with knowledge of 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,” reported ET.
Binance has a long history in India. It was believed to have acquired the local crypto exchange WazirX in 2019 but later claimed the deal never went through.
Binance claimed it only provided wallet services for WazirX as a tech solution and that WazirX was responsible for all other aspects of the exchange, including user sign-up, Know Your Customer (KYC), trading and initiating withdrawals.
While KuCoin and Binance have decided to become FIU-registered entities in India, OKX, another leading crypto exchange among the nine blocked crypto exchanges, shut its operations completely, citing the regulatory burden.
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