Binance, a popular cryptocurrency exchange, is set to make a comeback in India following a four-month ban. The exchange has agreed to pay a $2 million fine for non-compliance with regulations, according to a report in The Economic Times.
Binance will be the second foreign exchange, after KuCoin, to resume operations in India after the country’s financial regulatory body blocked access to crypto exchanges that were not in compliance with the rules. 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 failing to adhere to the Anti-Money Laundering Act.
Before the ban, Binance reportedly accounted for over 90% of the crypto trading volume in India. Indian users turned to foreign exchanges like Binance to avoid high tax rates, which prompted the government to ban unregistered overseas exchanges. Now, with FIU registration, foreign exchanges like Binance will have to follow the same rules and regulations as Indian exchanges.
KuCoin has already implemented a 1% tax deduction at source (TDS), and other foreign exchanges looking to enter the Indian market will have to do the same. However, OKX, another leading exchange among the nine that were blocked, has decided to shut down its operations completely due to the regulatory burden.
A source familiar with the matter told The Economic Times that it is unfortunate that Binance took more than two years to realize that it cannot negotiate for special treatment and that no global powerhouse can have an exemption that compromises the country’s financial system.
Binance has a history in India, as it was rumored to have acquired the local exchange WazirX in 2019, although the deal never went through, according to Binance. The exchange claimed that it only provided wallet services for WazirX as a tech solution, and WazirX was responsible for all other aspects of the exchange.
Cointelegraph has reached out to Binance for comment but has not received a response yet.