Binance Secures Regulatory Nod to Resume Services in India Amidst Strict Crypto Taxation

Binance, a leading global cryptocurrency exchange, has successfully secured approval from India’s Financial Intelligence Unit (FIU) to operate within the country. This development positions Binance as the second offshore crypto exchange to receive regulatory clearance in India, following KuCoin.

Vivek Agarwal, head of the FIU, confirmed that Binance has become a registered entity in India, as reported by CoinDesk. This news comes after Binance and nearly a dozen other foreign crypto exchanges were issued a noncompliance notice in December 2023. In response, the Indian Finance Ministry instructed its IT department to block access to these platforms in mid-January 2024. Exchanges like Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex were also affected by the regulatory action.

Despite these challenges, several crypto platforms began cooperating with Indian regulators to achieve compliance and reestablish their services in India. While KuCoin and Binance have successfully navigated their way back into the Indian market, others like OKX and BitStamp have ceased operations there.

Reports of Binance’s registration surfaced today, although Cointelegraph had earlier speculated in April that Binance was on the verge of returning to India after settling a $2 million fine for previous noncompliance issues.

The Indian crypto market has faced significant challenges due to stringent tax laws introduced by the government, including a hefty 30% tax on crypto gains and a 1% tax deduction at source on each transaction. These measures prompted many Indian investors to switch to foreign exchanges like Binance, which at one point handled 90% of India’s total crypto trading volume.

Despite the vibrant crypto trading activity, India’s stringent tax policies and ambiguous regulatory environment have cooled its status on the global crypto map. Many traders and crypto-related businesses have relocated abroad, and the remaining exchanges in India continue to face difficulties in attracting investors, exacerbated by limited banking support.

Cointelegraph has reached out to both Binance and the FIU for additional comments but has not received a response as of this publication.