After being prohibited by the Indian authorities, Binance is preparing for a return, having agreed to pay a substantial fine of around two million dollars.
A report from ET indicates that the world’s largest cryptocurrency exchange is planning to make a comeback in India, with the country’s finance ministry supervising its activities through the Financial Intelligence Unit (FIU).
Binance’s India Comeback
Due to recent advancements, Binance must now adhere to current regulations such as the Prevention of Money Laundering Act (PMLA) and the Virtual Digital Asset (VDA) taxation guidelines.
A source close to the matter was reported saying,
It’s regrettable that Binance didn’t recognize earlier that there’s no chance for bargaining, and no dominant force is entitled to special privileges, particularly if it means putting a nation’s financial infrastructure at risk.
Binance, which was formerly under fire for not strictly following Indian cryptocurrency regulations, seems committed now to working within the confines of the law in India’s cryptocurrency market.
Binance has now matched KuCoin’s action, as the latter exchange recently finished complying with the FIU. Based in Seychelles, this cryptocurrency exchange shared the news that it will begin subtracting a 1% Tax Deducted at Source (TDS) on every crypto transaction initiated by users through its platform.
Binance’s Tryst With India
Previously, approximately 90% of the reported $4 billion worth of cryptocurrencies owned by Indian residents were managed by Binance.
Following the July 2022 introduction of a 1% Tax Deduction at Source (TDS) by the Indian government on cryptocurrency trades, domestic crypto exchange volumes plummeted by almost 90%. In response, traders started using foreign exchanges, such as Binance, instead.
In late 2021, Changpeng Zhao, the founder and ex-CEO of Binance, announced that the cryptocurrency exchange had no plans to enter India because of the heavy taxation laws. Nevertheless, he confirmed that Indian residents could still use Binance’s services.
In late 2023, FIU (Financial Intelligence Unit) took action against nine cryptocurrency exchanges – Binance, Huobi, Kraken, Bitstamp, MEXC Global, Bitfinex, Kucoin, Bittrex, and Gate.io – by issuing them show cause notices for allegedly breaking the law in India. As a result, the Ministry of Electronics and Information Technology was advised by FIU to restrict access to these exchanges’ websites. Consequently, Google and Apple complied by removing the related apps from their Play Store and App Store platforms in India.
The Ministry of Finance makes it clear that registering and adhering to regulations for virtual asset deals doesn’t necessitate having a physical presence in India. Any entity involved in these transactions is required to follow regulatory guidelines, including reporting and maintaining records according to the Prevention of Money Laundering Act (PMLA).
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2024-04-19 10:15