After months of being banned for operating illegally, cryptocurrency exchanges Binance and KuCoin have been registered by India’s Financial Intelligence Unit (FIU), as reported by Coindesk. KuCoin has paid a penalty of $41,000 and resumed its operations, while Binance awaits a decision on the penalty following a hearing with the FIU.
Vivek Aggarwal, Head of FIU-IND, highlighted the importance of these registrations, stating that they enhance credibility within the sector. This move reflects India’s efforts to regulate the cryptocurrency market while safeguarding against financial crimes. The approval comes after a period of regulatory scrutiny during which both exchanges were banned in the region.
The exact penalty amount for Binance is yet to be determined, with sources suggesting it could be as high as $2 million. Aggarwal clarified that while Binance is registered, compliance proceedings are ongoing until the penalty is finalized.
Other platforms like Kraken, Gemini, and Gate.io are reportedly in negotiations with the regulator to comply with India’s regulations. Meanwhile, OKX and Bitstamp have proposed to exit the country. Aggarwal reiterated the importance of anti-money laundering and counter-terrorism financing policies, stressing the need for full visibility of transactions and reporting of suspicious activities.
India’s stance on cryptocurrency remains uncertain, with the imposition of heavy taxes in 2022 and subsequent market fluctuations causing uncertainty among traders. Despite prioritizing crypto during its G20 Presidency in 2023, India has faced criticism for pushing for global consensus without having its own legislation in place. A crypto bill has been on hold since 2021, indicating that a decision on its position is unlikely before mid-2025.
India has become an attractive market for crypto exchanges due to its large population and growing interest in cryptocurrencies, boasting over 19 million cryptocurrency investors, with a significant percentage between 18 and 35 years old. However, the Indian government remains cautious, recently imposing regulations such as a 1% tax on crypto transactions.
Despite Binance’s previous dominance in the Indian crypto space, regulatory hurdles led to its exit. The anticipated $2 million fine indicates a willingness to adhere to local laws, albeit at a significant cost. As Binance explores re-entering India, it faces both challenges and opportunities, including competition from local exchanges and evolving regulatory frameworks.
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