The Financial Intelligence Unit (FIU) of India has registered Binance and KuCoin, months after both cryptocurrency exchanges were banned for operating illegally, Coindesk reported. While KuCoin paid a penalty of $41,000 and resumed operations, Binance is awaiting a penalty decision following a hearing with the FIU.
Credibility Boost
Vivek Aggarwal, the Head of FIU-IND, emphasized the significance of these registrations, stating that they add credibility to the sector. The move underscores India's efforts to regulate the crypto market while safeguarding its economy against financial crimes. This approval followed a period of regulatory scrutiny, during which both exchanges were banned in the region.
The exact amount of penalty Binance will pay has yet to be determined, with sources suggesting it could amount to $2 million. Aggarwal clarified that although Binance is registered, compliance proceedings are ongoing until the penalty is finalized.
Other sanctioned platforms like Kraken, Gemini, and Gate.io have reportedly initiated negotiations with the regulator, aiming to comply with India's regulations. Meanwhile, OKX and Bitstamp have submitted proposals to exit the country. Aggarwal reiterated the importance of anti-money laundering and counter-terrorism financing policies, emphasizing the need for full visibility of transactions and reports of suspicious activities to be in place.
Negotiations and Compliance
India's stance on crypto is uncertain, with the imposition of stiff taxes in 2022 and subsequent market fluctuations leading to uncertainty among traders. Despite making crypto a priority during its G20 Presidency in 2023, India faces criticism for pushing global consensus without having its own legislation in place. The country has kept a crypto bill on hold since 2021, indicating that a decision on its position is unlikely before mid-2025.
India, with its vast population and growing interest in cryptocurrencies, has emerged as a lucrative market for crypto exchanges. According to reports, the country has over 19 million cryptocurrency investors, with a sizable percentage between 18 and 35 years old. Despite this enthusiasm, the Indian government is cautious toward digital currencies, recently imposing regulations such as a 1% tax on crypto transactions.
While Binance previously enjoyed dominance in the Indian crypto space, regulatory hurdles forced its exit. The expected $2 million fine indicates the willingness to adhere to local laws, albeit at a significant cost. As the exchange explores the possibility of re-entering India, it faces both challenges and opportunities. Moreover, competition from local exchanges and evolving regulatory frameworks adds to the complexity.
This article was written by Jared Kirui at www.financemagnates.com.
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