Binance, the world’s largest cryptocurrency exchange, is preparing to re-enter the Indian market despite being banned by the government earlier this year. To comply with Indian regulations, Binance plans to pay a fine of approximately $2 million and operate as a registered business with the Financial Intelligence Unit (FIU) of the finance ministry.
This move by Binance is seen as a significant step to adhere to Indian rules and regulations concerning cryptocurrencies, particularly the Prevention of Money Laundering Act (PMLA) and the Virtual Digital Assets (VDA) taxation framework, which are known to be strict.
Prior to the ban, Binance had a dominant position in the Indian cryptocurrency market, controlling around 90% of the $4 billion worth of cryptocurrency. However, the exchange’s failure to comply with tax legislation allowed investors to participate in trading operations without paying the required 1% tax deducted at source (TDS). As a result of the ban, Indian cryptocurrency investors shifted their focus to domestic platforms like CoinDCX and WazirX, leading to a significant influx of funds.
Furthermore, studies have shown that international cryptocurrency exchanges without an Indian registered office evade nearly 3,000 crore rupees in taxes annually.
With Binance’s commitment to comply with Indian laws and regulations, the crypto business in India is expected to experience positive growth. Market watchers believe that Binance’s return to the Indian market, with its higher liquidity and advanced technology compared to local exchanges, could have a substantial impact on market dynamics.
In other crypto news, Binance has recently obtained a full VASP license in Dubai.
