Binance, a leading global cryptocurrency exchange, has secured approval from India’s Financial Intelligence Unit (FIU) to operate in the country. This makes Binance the second offshore crypto exchange, after KuCoin, to receive such regulatory clearance.
FIU head Vivek Agarwal confirmed the news: “Binance is now a registered entity.”
The approval was granted after a period of regulatory scrutiny, where Binance, 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. In mid-January 2024, the Indian Finance Ministry also instructed the IT department to block access to these platforms in January 2024.
In response, Binance and KuCoin were those first to successfully adapt to the regulatory requirements, while OKX and BitStamp chose to exit the Indian market.
India’s strict tax regime on cryptocurrency, which includes a 30% tax on gains and a 1% tax deduction at source per transaction, drove many Indian investors to use foreign exchanges like Binance. At its peak, Binance handled 90% of India’s crypto trading volume.
Crypto traders and businesses are turning to regions with “friendlier” regulations to avoid heavy tax burden and strict regulations. Consequently, exchanges in India are struggling to gain investor trust and facing issues with inadequate banking solutions.