Binance Returns to India After Penalty Payment

Binance, the world’s leading cryptocurrency exchange previously barred from India, is poised for a comeback following the payment of a $2 million penalty, reports The Economic Times.

The exchange will re-enter the Indian market as an entity registered with the Financial Intelligence Unit (FIU) of the finance ministry, ensuring compliance with regulations governing trade in virtual digital assets (VDA), including the Prevention of Money Laundering Act (PMLA) and VDA taxation framework.

With assets and daily trade volume making it the largest cryptocurrency exchange globally, Binance recorded a staggering $22 billion in trade volume within the past 24 hours, representing a quarter of global trade, according to CoinMarketCap.

Previously among nine offshore platforms banned from operating in India due to non-compliance with FIU and PMLA guidelines, Binance held a significant market share, accounting for approximately 90% of Indian nationals’ $4 billion crypto holdings. Its dominance was fueled by lax tax adherence, allowing investors to circumvent the 1% tax deducted at source (TDS) applied on registered exchanges.

Following Binance’s ban, many Indian crypto investors migrated their holdings to domestic exchanges like CoinDCX and WazirX. Binance’s reluctance to subject its trades to scrutiny exacerbated concerns, particularly regarding substantial investments.

Binance’s forthcoming return signals a shift, mirroring Seychelles-based Kucoin’s recent compliance with FIU regulations, resulting in the lifting of its website ban. Industry leaders anticipate Binance’s re-entry could disrupt market dynamics due to its advanced technology and greater liquidity compared to domestic exchanges, coinciding with record-breaking highs for popular currencies like bitcoin and ethereum.

In its renewed Indian venture, Binance plans to introduce localized payment solutions, establish a dedicated team, and increase investment in the country’s blockchain ecosystem. Operating in over 100 regions, with notable operations in Seychelles, Malta, Cayman Islands, and Singapore, Binance’s headquarters are not publicly disclosed.