Binance, a popular cryptocurrency exchange, is planning to make a comeback in India following a four-month ban. The exchange has agreed to pay a $2 million fine for non-compliance with Indian regulations, as reported by The Economic Times.
Binance will be the second overseas exchange, after KuCoin, to return to the Indian market. Earlier this year, the country’s financial regulatory body blocked access to crypto exchanges that failed to comply with regulations.
In January, the Indian Ministry of Finance’s Financial Intelligence Unit (FIU) blocked access to the URLs and mobile applications of nine foreign crypto exchanges, including Binance, for not adhering to the Anti-Money Laundering Act.
Before the ban, Binance accounted for over 90% of crypto trading volume in India. Indian users turned to foreign exchanges like Binance to avoid heavy tax burdens, leading the government to ban unregistered overseas exchanges.
Now, with FIU registration, foreign crypto exchanges like Binance must follow the same rules and regulations as Indian exchanges. KuCoin has already started implementing a 1% tax deduction at source (TDS), and other foreign exchanges planning to enter the Indian market will have to do the same.
A source familiar with the matter told The Economic Times that it is regrettable that Binance took over two years to understand that it cannot negotiate special treatment and expose the country’s financial system to vulnerabilities.
Binance has had a long presence in India. It was rumored to have acquired the local crypto exchange WazirX in 2019, but later clarified that the deal did not go through. Binance claimed that it only provided wallet services for WazirX and that the exchange was responsible for all other aspects, including user sign-up, KYC, trading, and withdrawals.
While Binance and KuCoin have chosen to become FIU-registered entities in India, OKX, another prominent crypto exchange among the nine blocked exchanges, has decided to shut down its operations due to regulatory burdens.
Cointelegraph has reached out to Binance for comment but has not received a response yet.