Binance, the world’s largest cryptocurrency exchange that was banned by the government in January, is poised to return to India by paying a penalty of about $2 million, people aware of the developments told ET.
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The crypto exchange will come back as an entity registered with the Financial Intelligence Unit (FIU) of the finance ministry, they added. FIU is tasked with oversight of trade in virtual digital assets (VDA). Binance will comply with all applicable laws, including the Prevention of Money Laundering Act (PMLA) as well as the VDA taxation framework, “which it had been sloppily flouting until now”, said one person cited above.
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Officials aware of the matter said India’s stance “has always been clear to all global cryptocurrency exchanges — comply with all laws to continue operating in India”.
It is “unfortunate that it took (Binance) more than two years to realise there is no room for negotiations, and (that) no global powerhouse can command special treatment, especially at the cost of exposing the country’s financial system to vulnerabilities,” said one person cited above.
However, the official did not confirm the penalty amount of $2 million, or the calculations behind it. ET’s queries to Binance remained unanswered until press time on Wednesday.
Binance is the world’s largest crypto exchange, in terms of both asset holdings and daily trade volume. According to CoinMarketCap, it recorded a trade volume of $22 billion in the previous 24 hours (ending 7 pm IST on Wednesday), which is 25% of the global volume. In January, Binance was among nine offshore cryptocurrency platforms to be prohibited from operating in India through web addresses and mobile applications. The government's action was in response to the platforms’ failure to comply with FIU and PMLA guidelines.
Tax leaks Before it was banned, Binance accounted for nearly 90% of the estimated $4-billion crypto holdings of Indian nationals. The platform’s market dominance is mainly attributed to its non-compliance with tax laws, which allowed investors to trade without paying the 1% tax deducted at source (TDS) applicable on registered exchanges. Manhar Garegrat, India head at crypto custody solutions provider Liminal, said Binance’s re-entry must be considered a win, which will bring maturity to the crypto industry, with global companies investing in India. “However, it must be kept in mind that all exchanges are now on a levelplaying field, where there is no evasion of taxes. User acquisition and retention will be a different ball game altogether,” he added.
Subsequent to the ban on Binance, a significant chunk of Indian crypto investors moved their holdings to Indian exchanges, including the likes of CoinDCX, WazirX, which reported inflows growing by as much as 2,000% week-on-week. Typically, global crypto exchanges that do not have a registered entity in India were also causing hefty tax leakage of nearly Rs 3,000 crore every year to the exchequer, according to research by think tank Esya Centre. Executives in the cryptocurrency industry also pointed to Binance’s reluctance to open its trades for scrutiny, for fear that this would take away big-ticket investments.
Growing compliance The crypto major’s acquiescence to now operate as a fully-compliant entity marks a significant turnaround. “I think the bigger win here is getting an entity like Binance to agree and comply with Indian laws, and participate in the country’s financial monitoring system by reporting to the law enforcement agencies,” said a senior executive at an Indian cryptocurrency exchange.
Binance will be the second offshore exchange to register in India after Seychelles-based Kucoin announced FIU compliance last month, following which the ban on its website was lifted. Kucoin said that by registering, it “is setting a precedent for a more inclusive, secure and regulated cryptocurrency landscape in India.”
Market leaders believe Binance's return could upend the market dynamics, as it brings superior technology and larger liquidity than Indian exchanges. It is re-entering India at a time when popular currencies such as bitcoin and ethereum are breaching all-time highs.
Financial regulators in the likes of the US, the UK and Hong Kong have started approving crypto-backed securities for trade in traditional financial markets. Binance plans to offer localised payment solutions, build a dedicated India team and invest further in the country’s blockchain system.
According to its official website, it operates in more than 100 geographies. It has significant operations in Seychelles, Malta, Cayman Islands and Singapore. It does not list any specific headquarters.
World's largest crypto exchange Binance got registered with the Financial Intelligence Unit in India (FIU-IND), months after nine offshore exchanges in India were blocked for not following local anti-money laundering regulations.
According to a report by the local news site Moneycontrol, crypto exchange Binance has returned to the Indian crypto market after its formal registration from India's financial intelligence agency. Friday, a statement on the first registration of the exchange was given by the head of the Financial Intelligence Unit ( ...
KuCoin became among the first global cryptocurrency exchanges to register with FIU-IND. The world's largest cryptocurrency exchange, Binance, also becomes the exchange to register with FIU after its rival KuCoin, months after being banned from India for operating illegally.
At that time, Binance, one of the world's largest cryptocurrency exchanges, allowed users from India to access and use its platform. However, cryptocurrency regulations vary by country and can change over time. As of present yes it is legal.
In 2019, Binance was banned in the United States on regulatory grounds. In response, Binance and other investors opened Binance.US, a separate exchange designed to comply with all applicable US federal laws, which nonetheless is banned in six states: Hawaii, Idaho, Louisiana, New York, Texas, and Vermont.
Binance, being one of the most prominent cryptocurrency exchanges globally, has maintained a presence in India. The company has offered its services to Indian users, including the ability to buy, sell, and trade various cryptocurrencies.
In an astounding revelation, Binance announced its return to India as an entity registered with the Financial Intelligence Unit (FIU) of the financial ministry. The exchange plans to reform its South Asian entity and resume its services in India with a $2 million penalty.
The exchange intends to reestablish its presence in India as an entity registered with the Financial Intelligence Unit (FIU) of the finance ministry, signaling a commitment to compliance with Indian laws governing virtual digital assets (VDA), including the Prevention of Money Laundering Act (PMLA) and VDA taxation ...
The Ministry has further clarified that even offshore VDA service providers (which are engaged in servicing the Indian market) must register with FIU-IND as reporting entities. Reportedly, 31 VDA service providers have been registered as reporting entities with the FIU-IND (till date).
CoinSwitch is one of the safest homegrown crypto exchanges in India. It is a platform best suited for those who are new to crypto trading, as it offers a user-friendly interface and seamless in-app integration. It supports multiple modes of payment, including UPI, bank transfer, net banking, and debit and credit cards.
Can I use Binance in the US with a VPN? Yes, you can use a VPN to gain access to Binance.com in the US. A VPN hides your real IP address and location behind an IP address belonging to your provider in the country you connect to.
There is no option for withdraw money in INR from Binance without P2P. There are some apps which provide withdraw money in INR but most are scams. To withdraw money in Indian rupees from Binance without using P2P in 2023, you can follow these steps: 1.
Months After Ban, Binance & Kucoin Get FIU Nod To Operate In India. Currently banned by the Indian government, crypto exchange Binance has reportedly received approval from the Financial Intelligence Unit (FIU) of the finance ministry to operate as a virtual asset service provider (VASP).
KuCoin, the People's Exchange and your preferred platform to find the next crypto gem, is pleased to announce that we have become among the first global crypto exchanges to register with India's Financial Intelligence Unit (FIU).
Binance US uses Form 1099-MISC to report miscellaneous ordinary income to the IRS. The crypto-specific edition of the 1099-MISC is used to report the gross income of traders who receive cryptocurrency rewards or engage in staking.
But all of this changed in 2019, when three financial regulators — the CFTC, SEC, and FinCEN — issued a joint statement formally classifying cryptocurrency exchanges as financial institutions subject to anti-money-laundering (AML) rules established by the Bank Secrecy Act.
Is Binance Exchange Safe? Binance is often considered one of the safest exchanges in the world if you consider the level of security. If the exchange crashed or a hacker stole assets or funds, the SAFU reimburses its users from the $1 billion fund. Not every platform has an insurance fund in place.
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