Binance is finally back in India after a seven month ban. This has served as a 78th Independence day gift to the Indian crypto community. Let’s explore the journey of Binance from a ban to fully function and what this means for the Indian crypto ecosystem.
A Seven Month Long Ban
India banned Binance and other 8 offshore Crypto exchanges on 12 Jan 2024. The Ministry of Electronics and Information Technology (MeitY) took this action. This ban came after the show cause notice to these nine offshore VDA providers by the Financial Intelligence Unit (FIU) on December 28, 2023. Including Binance this ban was imposed on Bitstamp, Kucoin, Huobi, MEXC Global, Kraken, Gate.io, Bitfinex and Bittrex.
These crypto companies received the show cause notice under Section 13 of the Prevention of Money Laundering Act, 2002 (PMLA). According to the government authorities of India, these exchanges received the notice for operating illegally in India. In Jan, 2024, Indian Authorities blocked URLs of these Offshore Crypto Exchanges. Apps store and Play store also removed their applications.
Registration With FIU-IND
Binance is not the first offshore VDA provider to perform registration with IND-FIU. On March 23, KuCoin officially announced that they have registered with FIU. They had to pay a penalty of $41,000 in order to resume their operations in India. KuCoin got their website URL unblocked in May. The same month, it was announced that Binance had also processed the registration with FIU, however a penalty was pending. Later it came to light that FIU has penalized Binance with a sum of $2.2 Million.
While most of the Crypto exchanges do not wish to lose the Indian trader community, OKX declared exiting India on 30th April, 2024. It is interesting to note that OKX was not among the nine offshore exchanges to receive the notice from the Indian government.
Return Of Binance In India
Coinpedia was the first to report this update. On July 30, we reported that Binance URL was accessible in India. We tested the URL across various Indian cities, it tested positive in most Indian cities. One day before India’s 78th Independence day, Binance URL became completely accessible across PAN India. However, the apps were still missing from stores. Binance app became visible on Android Play Store and Apple App Store early morning 15 August. Binance, in a blog post shared all the details of their registration with Indian Authorities and their return to India.
Words From Binance CEO
The CEO of Binance, Richard Teng, posted on X showing how thrilled the company is to be registered with FIU-IND. Wishing India a happy Independence day he stated that this is the 19th Global regulatory milestone for Binance.
What’s Next
Now that Binance is fully functional in India, they will deduct the 1% TDS on crypto transactions according to Section 194S of the IT Act. This rule came into effect from 1 July, 2022. Registration of Binance with FIU also means that the exchange will have to report any kind of suspicious transaction to the FIU. The exchange may require its Indian users to re-perform the KYC in accordance with the Indian Anti Money Laundering laws.
This is one step forward towards making India make a strong presence in the Crypto world, however the community does not appreciate the 30% tax in Crypto.
