Binance, the world’s largest cryptocurrency exchange, has resumed its operations in India after a seven-month suspension. The reopening follows Binance’s registration as a reporting entity with India’s Financial Intelligence Unit (FIU), a key step in complying with local regulatory requirements.
Indian authorities initiated the halt in Binance’s operations late last year, along with a ban on nearly a dozen other foreign cryptocurrency exchanges, including Kraken, KuCoin, and Mexc.
The decision, prompted by FIU, was rooted in concerns that these offshore platforms were operating without proper registration, circumventing India’s anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.
The FIU’s crackdown was also influenced by complaints from domestic cryptocurrency exchanges, which reported losing significant market share to their non-compliant international counterparts. These local players lobbied the Ministry of Finance, arguing that the unregulated operations of foreign exchanges were undermining fair competition within India’s burgeoning digital asset market.
“Our registration with the FIU-IND marks an important milestone in Binance’s journey. Recognising the vitality and potential of the Indian VDA market, this alignment with Indian regulations allows us to tailor our services to the needs of Indian users,” said Richard Teng, CEO of Binance.
Although India is quickly becoming more digital and is an important market for big tech companies worldwide, its crypto market is still in its early phases, TechCrunch reports. In recent years, India’s central bank, the Reserve Bank of India (RBI), has been pushing hard to keep banks from working with crypto businesses.
In addition, the Indian government has imposed high taxes on crypto trades, which has made many Indian investors less interested in getting involved.
The regulatory challenges faced by industry have led to a cautious approach by many international players. Coinbase, for instance, ceased onboarding new customers from India in 2023, citing informal pressure from the RBI as a key factor behind its decision.
The recent breach in WazirX has further complicated the situation. The hack, which resulted in WazirX losing half of its assets, has fuelled ongoing debates about the safety and viability of cryptocurrency trading in India.
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