Reportedly, Binance intends to comply with Indian anti-money-laundering and tax regulations by operating as a registered corporation there.
The Indian government banned Binance, but the cryptocurrency exchange is about to return after agreeing to pay a $2 million fine.
According to ET’s reporting, the Financial Intelligence Unit (FIU) of India’s Ministry of Finance is approving the biggest cryptocurrency exchange in the world to re-enter the Indian market.
It has now come to light that Binance must adhere to preexisting legal systems, such as the VDA taxation structure and the Prevention of Money Laundering Act (PMLA).
According to a person with knowledge of the situation, “Binance took more than two years to realize there was no room for bargaining and that no global powerhouse can demand special treatment, especially if it means leaving the country’s financial system open to attacks.”
Binance is intent on staying within the bounds of the Indian cryptocurrency ecosystem’s regulatory framework, after facing criticism for its previous lack of compliance with these rules.
Following KuCoin’s lead, Binance has now also declared that it has completed compliance with the FIU. Every bitcoin transaction that customers begin via the site will now be subject to a 1% TDS, according to the Seychelles-headquartered exchange.
According to estimates, Indian people have $4 billion worth of bitcoin, with Binance owning a substantial 90% market share.
There was a precipitous 90 percent drop in trading volume on Indian exchanges when the government imposed the one percent TDS on cryptocurrency transactions in July 2022. Offshore cryptocurrency exchanges, such as Binance, attracted traders instead.
In light of the country’s high tax climate, Binance founder and ex-CEO Changpeng Zhao (CZ) said later that year that the exchange had no plans to expand into India. But he did say that Indian people may still use Binance’s services.
When the Financial Intelligence Unit (FIU) sent a show cause notice on nine exchanges—Binance, Huobi, Kraken, Bitstamp, MEXC Global, Bitfinex, Kucoin, Bittrex, and Gate.io—in late 2023, things started to shift. Google and Apple removed these applications from their respective platforms in India after the FIU advised the Ministry of Electronics and Information Technology to ban access to the websites of the exchanges.
There is no need to have a physical presence in India to fulfil registration and compliance requirements, according to the Ministry of Finance. The PMLA imposes reporting and record-keeping requirements on all organizations that deal in virtual assets.
Also Read: Tether Expands Its Scope Beyond Stablecoin Development via Reorganization
