Binance, the world's largest cryptocurrency exchange, is set to re-enter the Indian market after agreeing to pay a $2 million penalty. The move comes under the supervision of the Financial Intelligence Unit (FIU) of India's finance ministry.

Binance will now adhere to existing regulatory frameworks, including the Prevention of Money Laundering Act (PMLA) and the taxation framework for virtual digital assets (VDA). This indicates a significant shift in Binance's approach, previously criticized for its lax adherence to these laws.

Binance's return to India follows KuCoin's recent compliance with the FIU, marking a trend among exchanges to operate within the legal boundaries of the Indian cryptocurrency ecosystem.

Despite a high taxation environment and a significant drop in trading volume following the implementation of a 1% TDS on cryptocurrency trading, Binance's re-entry signifies a positive outlook for the Indian crypto market. The Ministry of Finance has clarified that all entities engaging in virtual asset transactions must comply with regulatory mandates, reinforcing the importance of regulatory compliance in the sector.