Binance Set to Re-Enter India After Paying $2 Million Penalty: Report

Binance, the world’s largest cryptocurrency exchange, is reportedly preparing to make a comeback in India after being banned by the government in January.

According to a report by the Economic Times of India, the exchange is set to pay a penalty of approximately $2 million. Additionally, sources familiar with the matter stated that the exchange will register with the Financial Intelligence Unit (FIU) of the finance ministry, which oversees the trade in virtual digital assets (VDA).

Key points:

• Binance will comply with all applicable laws, including the Prevention of Money Laundering Act (PMLA) and the VDA taxation framework.
• Before the ban, Binance provided a haven for over 90% of Indian investors’ estimated $4 billion cryptocurrency holdings.
• The platform’s market dominance was primarily attributed to its non-compliance with tax laws.
• It allowed investors to trade without paying the 1% tax deducted at source (TDS).
• Binance is set to become the second offshore exchange to register in India.

India stands firm in its crypto stance

Officials familiar with the matter have stated that India’s stance on global cryptocurrency exchanges has always been clear: comply with all laws to continue operating in the country.

One official noted that it is “unfortunate that it took Binance more than two years to realize there is no room for negotiations and that no global powerhouse can command special treatment.”

While the official did not confirm the exact $2 million penalty amount or the calculations behind it, sources have indicated that Binance will pay this sum to re-enter the Indian market.  

Binance’s re-entry follows in the footsteps of Kucoin, which announced its compliance with FIU regulations last month and subsequently had the ban on its website lifted. 

As Binance prepares to re-enter the Indian market, it remains to be seen how the exchange will surf through the country’s tough crypto stance.