Global cryptocurrency exchange Binance has obtained approval to offer its services in India from an Indian financial regulator called the Financial Intelligence Unit (FIU).
The recent approval makes Binance the second off-shore crypto exchange to get a regulatory nod after KuCoin.
According to a report published in CoinDesk, Vivek Agarwal, the head of FIU, said that Binance is now a registered entity.
Binance and KuCoin were among nearly a dozen foreign crypto exchanges that received a notice of noncompliance in December 2023. Within 15 days of notice, the Indian Finance Ministry told its IT department to block URLs and mobile applications’ access to the banned crypto platforms in India in mid-January 2024.
Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex also received the regulatory notice.
Following the ban, several crypto platforms started working with the Indian regulatory body to obtain FIU compliance and offer their services to Indian customers. While KuCoin and Binance managed to find their way back, the likes of OKX and BitStamp have closed their services in the country.
Although the FIU registration reports surfaced today, Cointelegraph reported in the third week of April that Binance will likely return to India after paying a $2 million fine for noncompliance.
After India imposed a hefty 30% tax on crypto gains and a 1% tax deduction at source on every crypto transaction, many Indian investors fled to foreign crypto exchanges to bypass the tax regime. At the peak of the tax drain, Binance reportedly accounted for 90% of the total trading volume from India.
Despite having a thriving crypto market, with most of the major crypto exchanges looking to set foot in the country, India has cooled on the crypto heat map owing to its tax impositions and lack of regulatory clarity. A large chunk of crypto traders and crypto-centered businesses have shifted overseas, while the few crypto exchanges that have remained continue to struggle to garner investor trust due to a lack of banking facilities.