Binance is considering re-entering the Indian market after paying a $2 million penalty to local authorities, according to a report from The Economic Times published today (Thursday). The cryptocurrency exchange was ousted from the country last January for failing to comply with local laws.
India: A Lucrative Market for Crypto Exchanges
The report emerged just a month after KuCoin, a Seychelles-based cryptocurrency exchange, announced its compliance with Indian regulations. Binance, KuCoin, and seven other global cryptocurrency exchanges were blocked by India’s Financial Intelligence Unit for violating local anti-money laundering laws.
Following the order of the Indian authority, the mobile apps of these cryptocurrency exchanges were removed from Google’s Play Store and Apple’s App Store. The domains of their websites were also blocked in the country.
Although there is no official confirmation, the local publication cited two anonymous sources regarding the exchange’s planned re-entry into the country.
“[It is] unfortunate that it took [Binance] more than two years to realise there is no room for negotiations, and [that] no global powerhouse can command special treatment, especially at the cost of exposing the country’s financial system to vulnerabilities,” an anonymous source told the publication.
Binance’s India Strategy
Binance is the largest cryptocurrency exchange globally in terms of asset holdings and trading volume. It also dominated the Indian markets when it was operational there. Although there were several local crypto exchanges operating in India, Binance had an advantage due to its vast liquidity pool.
India is a massive country with a population of over 1.4 billion. According to a report by the local crypto exchange CoinSwitch, the country has over 19 million cryptocurrency investors, of whom nearly nine percent are women. Further, about 75 percent of cryptocurrency investors in India are aged between 18 and 35.
Despite the popularity of cryptocurrencies, the Indian government’s stance towards digital currencies has remained cautious. Currently, all crypto exchanges are required to deduct a 1 percent tax at source for all executed crypto transactions. Hpwever, OKX which was not named in the Indian authorities' banned list, which also exited the country earlier this year, citing harsh local regulations.
This article was written by Arnab Shome at www.financemagnates.com.
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