Binance to Make a Comeback to India: Details

Binance, the world’s largest cryptocurrency exchange, is gearing up to make a comeback in the Indian market after facing a ban from the Indian government earlier this year. 

Reports suggest that Binance is planning to pay a penalty of around $2 million as part of its re-entry strategy. The exchange aims to operate as an entity registered with the Financial Intelligence Unit (FIU) of the finance ministry, signaling its commitment to adhering to Indian laws and regulations.

Binance to Make a Comeback

This move highlights Binance’s acknowledgment of the significance of regulatory compliance in India’s cryptocurrency landscape, particularly in light of the country’s stringent regulatory framework, including the Prevention of Money Laundering Act (PMLA) and the Virtual Digital Assets (VDA) taxation framework.

Before the ban, Binance held a dominant position in the Indian cryptocurrency market, controlling nearly 90% of the country’s estimated $4-billion crypto holdings. However, its non-compliance with tax laws allowed investors to trade without paying the 1% tax deducted at source (TDS), applicable on registered exchanges.

Local Exchanges Face a Boom

The ban prompted Indian crypto investors to shift their holdings to local exchanges like CoinDCX and WazirX, resulting in significant inflows for these platforms. 

Additionally, research indicates that global crypto exchanges operating without a registered entity in India led to substantial tax leakage, estimated at nearly Rs 3,000 crore annually.

Binance to Comply with Indian

Binance’s decision to comply with Indian laws and regulations is seen as a positive development for the crypto industry in India. Observers anticipate that Binance’s re-entry could have profound implications for market dynamics due to its advanced technology and larger liquidity compared to domestic exchanges.

Furthermore, Binance has ambitious plans for its renewed presence in India, including the introduction of localized payment solutions, establishing a dedicated India team, and making further investments in the country’s blockchain ecosystem. 

This aligns with global trends, as financial regulators in countries like the US, the UK, and Hong Kong increasingly embrace cryptocurrencies and approve crypto-backed securities for traditional financial markets.