Binance, the world’s largest crypto exchange, is reportedly poised to continue its operations after agreeing to pay India’s Financial Intelligence Unit (FIU-IND) a fine.
This decision is a key part of a broader compliance drive by international exchanges with Indian regulations.
Binance Joins KuCoin to Become Compliant Crypto Exchange in India
Binance and KuCoin achieved a milestone by becoming the first offshore crypto-related entities to register with FIU-IND. This step is indeed crucial in a sector where Indian authorities demand compliance with strict anti-money laundering (AML) laws.
The need for registration arose after a challenging period in December 2023, when FIU-IND issued show-cause notices to nine offshore crypto exchanges. This also included industry leaders like Binance.
Read more: The State of Crypto Regulation in India
With Apple removing non-compliant platforms from its App Store and the IT Ministry blocking their websites, users were urged to transfer their assets to FIU-registered Indian exchanges. These notices stemmed from the exchanges operating without adhering to the Prevention of Money Laundering Act (PMLA) of 2002, which demands stringent record-keeping and reporting standards.
Finally, following the footsteps of KuCoin, which has resumed operations after settling a $41,000 penalty, Binance might make a similar move.
“Binance is registered but the compliance proceedings are not completed because the amount of penalty has to be decided by me and that hearing is still going on,” Vivek Aggarwal, head of FIU-IND said.
Sumit Gupta, the co-founder of the Indian crypto exchange – CoinDCX, welcomed Binance and KuCoin to the Indian market. In an interview with BeInCrypto, Gupta expressed enthusiasm about the developments.
“A compliant crypto ecosystem, comprising FIU-compliant players, not only benefits all stakeholders but also safeguards against bad actors. These developments mark significant progress towards ensuring that crypto exchanges operate in accordance with regulations like the Prevention of Money Laundering Act (PMLA), thus laying the foundation for a more compliant ecosystem,” Gupta told BeInCrypto.
Balaji Srihari, the Business Head at CoinSwitch, also echoes these sentiments.
“It is commendable to see major global exchanges such as Binance and KuCoin leading by example and adhering to FIU standards. These norms establish a systematic approach to monitoring transactions and provide a designated channel for reporting suspicious activities,” Srihari told BeInCrypto.
As Binance edges towards full compliance, its customers will likely incur financial obligations. This includes a 1% tax deduction at source (TDS). Introduced in 2022, a 1% TDS on crypto trading aims to increase transparency.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
Moreover, traders face a 30% capital gains tax on profits, which has been a contentious issue within the crypto community. However, these regulatory measures are part of a broader effort by the Indian government to regulate the crypto market. The goal is to align with global standards while protecting investor interests.
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