In a significant development for the cryptocurrency market in India, Binance, the world’s largest cryptocurrency exchange by trading volume, has successfully registered with India’s Financial Intelligence Unit (FIU) as of May 2024, and as of mid-August, it is available on iOS and Android.
The registration follows a period of regulatory crackdown where Binance, along with other offshore crypto exchanges, faced bans for non-compliance with local anti-money laundering (AML) and taxation laws.
The path to compliance
Binance’s journey back into the Indian market was fraught with regulatory hurdles. Initially barred from operating in India in December 2023 due to issues with the Prevention of Money Laundering Act (PMLA), the recent registration process involved paying a hefty fine of $2.25 million.
Implications for the Crypto Market
The approval of Binance’s registration signifies its return to one of the world’s largest potential markets for cryptocurrencies and sets a precedent for other offshore exchanges. The move could lead to a more regulated crypto environment in India, potentially attracting more investors due to the perceived increase in legitimacy and security. The registration also comes with the promise of Binance contributing to India’s financial monitoring system, enhancing law enforcement’s ability to track financial transactions for AML purposes.
Market sentiment and future prospects
The news was met with enthusiasm across the crypto community in India.
However, the sentiment also reflects a cautious optimism, with users and experts alike watching how Binance’s compliance with local laws will unfold, especially concerning taxation and the 1% tax deducted at source (TDS) applicable on registered exchanges.
Regulatory landscape and global impact
India’s approach to cryptocurrency has been a mix of caution and openness, aiming to balance innovation with regulatory oversight. The registration of Binance, following similar moves by other exchanges like KuCoin, might encourage other global crypto platforms to seek compliance with Indian laws, thereby integrating more deeply into the country’s financial ecosystem. This could also influence international crypto policies, showcasing India’s stance on digital assets as a blend of regulatory stringency and market openness.