Binance, the world’s largest cryptocurrency exchange, is preparing to re-enter the Indian market despite the government’s earlier ban. In order to comply with Indian regulations, Binance’s re-entry plan includes paying a fine of approximately $2 million. The exchange aims to demonstrate its commitment to following Indian rules and regulations by operating as a registered business with the Financial Intelligence Unit (FIU) of the finance ministry.
This move is significant as it recognizes the importance of adhering to Indian regulations, particularly the Prevention of Money Laundering Act (PMLA) and the Virtual Digital Assets (VDA) taxation framework, which are considered some of the strictest in the world. Prior to the ban, Binance held a dominant position in the Indian cryptocurrency market, controlling around 90% of the $4 billion worth of cryptocurrency. However, the exchange’s failure to comply with tax legislation allowed investors to participate in trading operations without paying the required 1% tax deducted at source (TDS).
Following the ban, Indian cryptocurrency investors shifted their trading activities to domestic platforms like CoinDCX and WazirX, resulting in a significant influx of funds into these platforms. Additionally, studies have revealed that international cryptocurrency exchanges without an Indian registered office evaded nearly 3,000 crore rupees in taxes annually.
With Binance now adapting its strategy to comply with Indian laws and regulations, the crypto business in India is expected to experience positive growth. Market observers believe that Binance’s return to the Indian market, given its higher liquidity and superior technology compared to local exchanges, could have a substantial impact on market dynamics.
In other crypto news today, Binance has secured a full VASP (Virtual Asset Service Provider) license in Dubai.