Binance, a popular cryptocurrency exchange, is poised to make a comeback in India following a four-month ban. The exchange has agreed to pay a $2-million fine for its non-compliance with regulations, as reported by The Economic Times. Binance will be the second overseas exchange, after KuCoin, to return to the country after the Indian financial regulatory body blocked access to crypto exchanges due to their failure to comply with regulations.
In January, the Indian Ministry of Finance’s Financial Intelligence Unit (FIU) blocked access to the URLs and mobile applications of nine foreign crypto exchanges, including Binance, for not adhering to the Anti-Money Laundering Act. Prior to the ban, Binance accounted for over 90% of the crypto trading volume in India.
Indian users turned to foreign exchanges like Binance to circumvent heavy tax burdens, prompting the government to ban unregistered overseas exchanges. With FIU registration, foreign exchanges like Binance are now required to comply with the same rules and regulations as their Indian counterparts. KuCoin has already implemented a 1% tax deduction at source (TDS), and other foreign exchanges looking to enter the Indian market will need to follow suit.
A source familiar with the matter expressed disappointment that it took Binance more than two years to realize that special treatment was not possible and that no global powerhouse could dictate terms at the expense of the country’s financial system.
Binance has had a significant presence in India, with reports suggesting that it acquired the local exchange, WazirX, in 2019. However, Binance later clarified that the deal did not go through and that it only provided wallet services for WazirX as a tech solution. WazirX was responsible for all other aspects of the exchange.
While Binance and KuCoin have opted to become FIU-registered entities in India, OKX, another prominent exchange among the nine blocked exchanges, has shut down its operations due to regulatory burdens.
Cointelegraph has reached out to Binance for comment but has not received a response at the time of writing.