India's Financial Intelligence Unit (FIU) has registered Binance and KuCoin, months after banning the cryptocurrency exchanges from operating illegally, Coindesk reported. While KuCoin paid a $41,000 fine and resumed operations, Binance is awaiting a penal decision after a hearing with the Financial Intelligence Unit.
Enhance credibility
Vivek Agarwal, head of India's Financial Intelligence Unit, stressed the importance of these recordings, noting that they add credibility to the sector. This move underscores India's efforts to regulate the cryptocurrency market while protecting its economy from financial crimes. This approval came after a period of regulatory scrutiny, during which both exchanges were banned in the region.
The exact amount of penalty that Binance will pay has not yet been determined, with sources indicating that it could reach $2 million. Aggarwal explained that although Binance has been registered, compliance measures are ongoing until the penalty is completed.
Other sanctioned platforms such as Kraken, Gemini, and Gate.io have also reportedly begun negotiations with the regulator, with the aim of complying with Indian regulations. Meanwhile, OKX and Bitstamp have submitted proposals to exit the country. Agarwal emphasized the importance of anti-money laundering and counter-terrorism financing policies, stressing the need for complete visibility into transactions and reports of suspicious activities.
Negotiations and compliance
India's stance on cryptocurrencies is uncertain, with stringent taxes in 2022 and subsequent market volatility creating uncertainty among traders. Despite making cryptocurrencies a priority during its G20 presidency in 2023, India faces criticism for pushing into global consensus without creating legislation of its own. The country has kept the cryptocurrency bill on hold since 2021, suggesting a decision on its position is unlikely before mid-2025.
India, with its large population and growing interest in cryptocurrencies, has emerged as a lucrative market for cryptocurrency exchanges. According to reports, the country has more than 19 million cryptocurrency investors, with a large percentage between the ages of 18 and 35. Despite this enthusiasm, the Indian government is cautious towards cryptocurrencies, recently imposing regulations such as a 1% tax on cryptocurrency transactions.
While Binance previously enjoyed dominance in the Indian cryptocurrency space, regulatory hurdles forced it out. The expected fine of $2 million indicates a willingness to comply with local laws, albeit at a significant cost. As the exchange explores the possibility of returning to India, it faces challenges and opportunities. Furthermore, competition from local exchanges and evolving regulatory frameworks add complexity.
This article was written by Jared Kirroy at www.financemagnates.com.