In a major development, Binance has announced its return to India as an entity registered with the Financial Intelligence Unit of the Finance Ministry.
The Indian government banned the world’s largest cryptocurrency exchange in January, but it has now committed to adhering to all relevant laws, including the PMLA and the VDA taxation framework.
Binance Makes India Return
According to the announcement, Binance will return to India as an entity registered with the Financial Intelligence Unit. India’s Financial Intelligence Unit oversees trades conducted in virtual digital assets. The government expanded the scope of its Prevention of Money Laundering Act to include VDA platforms such as Binance. Binance has now committed to following and complying with all of the relevant laws, including the Prevention of Money Laundering Act and the VDA taxation framework, which it had been flouting.
Indian officials maintained that the country’s position regarding global cryptocurrency exchanges had been consistent, and exchanges had to adhere to all local laws if they wished to continue their operations in the country. One official was quoted as saying,
“It is unfortunate that it took (Binance) more than two years to realize 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.”
The Financial Intelligence Unit had issued notices to nine cryptocurrency exchanges, including Binance and KuCoin, for not complying with several provisions of India’s anti-money laundering laws. It also wrote to the Ministry of Electronics and Information Technology (MeitY), asking it to block access to the nine platforms in question. Binance was subsequently delisted from app stores in India, and its website was blocked as well. However, the exchange had been in talks with the Indian government to allow users to regain access to its app and website in India.
Negotiations With The Government
Earlier reports stated that Binance was willing to pay taxes and penalties but was not yet ready to comply with the Prevention of Money Laundering Act (PMLA) guidelines. However, the government turned down Binance’s request to resume temporary operations, insisting that the platform first implement compliance measures to adhere to the country’s laws, including the PMLA. The government had expanded the scope of its PMLA law to include VDA platforms, with many such as CoinDCX, WazirX, Coinswitch, and Zebpay registering with the Financial Intelligence Unit.
Binance will become the second overseas exchange to make a return to India after KuCoin. However, others, such as OKX, have shut their India operations completely, citing regulatory complications.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.