Binance, the global cryptocurrency exchange, has been granted approval by the Indian financial regulator, the Financial Intelligence Unit (FIU), to offer its services in India. This makes Binance the second offshore crypto exchange to receive regulatory approval, following KuCoin. The head of FIU, Vivek Agarwal, confirmed that Binance is now a registered entity.
In December 2023, Binance and KuCoin, along with several other foreign crypto exchanges, received a notice of noncompliance. Within 15 days, the Indian Finance Ministry instructed its IT department to block access to the banned crypto platforms in India. Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex also received the regulatory notice.
After the ban, many crypto platforms began working with the Indian regulatory body to become FIU compliant and resume their services for Indian customers. While Binance and KuCoin were successful in doing so, OKX and BitStamp decided to close their services in the country.
Although the news of Binance’s FIU registration has just surfaced, Cointelegraph reported in April that Binance was likely to return to India after paying a $2 million fine for noncompliance.
India’s imposition of a 30% tax on crypto gains and a 1% tax deduction on every crypto transaction led many Indian investors to turn to foreign crypto exchanges to avoid the tax regime. At its peak, Binance reportedly accounted for 90% of the total trading volume from India.
Despite having a thriving crypto market and the interest of major crypto exchanges, India has lost its appeal due to high taxes and regulatory uncertainties. Many crypto traders and businesses have moved overseas, while the few remaining exchanges struggle to gain investor trust due to a lack of banking facilities.
Cointelegraph reached out to Binance and FIU for comments but has not yet received a response at the time of publication.