Binance, the global cryptocurrency exchange, has recently received approval from the Financial Intelligence Unit (FIU) in India, allowing it to offer services in the country.
This development positions Binance as the second offshore crypto exchange to receive such regulatory approval, following KuCoin.
In a CoinDesk report, FIU head Vivek Agarwal stated, “Binance is now a registered entity.”
The approval comes after Binance, along with KuCoin and other major exchanges like Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, were issued non-compliance notices by Indian authorities in December 2023.
The Indian Finance Ministry had subsequently directed its IT department to block access to these platforms in mid-January 2024.
These regulatory challenges prompted several exchanges to seek compliance with FIU requirements to continue operating in India.
While KuCoin and Binance successfully navigated the regulatory landscape to reinstate their services, others such as OKX and BitStamp opted to cease operations within the country.
READ MORE: Australia’s Tax Office Targets 1.2 Million Crypto Users in Compliance Crackdown
In response to India’s stringent tax laws on cryptocurrency—comprising a 30% tax on gains and a 1% tax deduction at source on each transaction—many Indian investors turned to foreign exchanges like Binance. At its height, Binance handled 90% of crypto trading volume from India.
The Indian market’s heavy tax burden led to a significant migration of crypto traders and businesses to more favorable regulatory environments abroad.
Consequently, the remaining crypto exchanges in India faced difficulties in building trust with investors, further hampered by the absence of robust banking solutions.
Despite these challenges, India remains a key market for major cryptocurrency exchanges.
However, the regulatory uncertainty and stringent tax measures have cooled its appeal on the global crypto stage.
As of the latest updates, Cointelegraph has reached out to both Binance and FIU for comments but has not received any response yet.
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