The Return of Binance to the Indian Cryptocurrency Market

The Return of Binance to the Indian Cryptocurrency Market

Binance, the world’s largest cryptocurrency exchange, was once banned by the Indian government. However, after agreeing to pay a penalty of approximately $2 million, Binance is now set to make a comeback in the Indian market. The agreement includes oversight by the finance ministry’s Financial Intelligence Unit (FIU), where Binance will have to comply with existing regulatory frameworks such as the Prevention of Money Laundering Act (PMLA) and the virtual digital assets (VDA) taxation framework.

Previously criticized for its lack of adherence to these laws, Binance is now determined to operate within the legal boundaries of the Indian cryptocurrency ecosystem. Following KuCoin’s lead, which recently completed compliance with the FIU, Binance confirmed that it will deduct 1% TDS on each cryptocurrency transaction initiated by users on its platform. This move signifies Binance’s commitment to compliance and regulation in the Indian market.

Binance held a significant market share of around 90% of the estimated $4 billion in cryptocurrency holdings among Indian residents. However, after the implementation of the 1% TDS on cryptocurrency trading in July 2022, Indian exchanges experienced a nearly 90% decline in trading volume. This led traders to flock to offshore crypto exchanges like Binance, which offered them an alternative platform to continue trading.

In the past, Binance’s founder and former CEO, Changpeng Zhao (CZ), stated that the exchange had no plans to expand into India due to the high taxation environment. Despite this, Binance’s services were still accessible to Indian residents. However, in late 2023, the FIU issued a show cause notice to nine exchanges, including Binance, for illegal operations in the country. This led to the recommendation to block access to these exchanges’ websites, prompting Google and Apple to remove their apps from the Play Store and App Store platforms in India.

The Ministry of Finance has clarified that registration and compliance obligations do not require physical operations in India. All entities engaging in virtual asset transactions must comply with regulatory mandates, such as reporting and record-keeping under the PMLA. This underscores the importance of regulatory compliance in the Indian cryptocurrency market and the need for exchanges like Binance to adhere to these regulations to operate legally and securely.

Crypto

Articles You May Like

The Rise and Fall of Aiden Pleterski – Ontario’s Crypto King
Crypto Influencer Ian Balina Faces Legal Troubles for Unregistered Securities Offering
The MIT Siblings Exploiting the Ethereum Blockchain
The Evolution of Polkadot: Innovations, Partnerships, and Advancements

Leave a Reply

Your email address will not be published. Required fields are marked *