The Financial Intelligence Unit (FIU) of India registered Binance and KuCoin months later after they were banned for operating illegally. Reports indicate that KuCoin paid a fine of $41,000 and resumed operations, while Binance is awaiting the FIU's decision on the fine after a hearing.

Boosting credibility

Vivek Aggarwal, head of India's FIU-IND, emphasized the significance of these registrations, stating that they enhance the credibility of the industry and highlight India's efforts in regulating the cryptocurrency market and protecting its economy from financial crimes. These approvals came after a period of regulatory scrutiny during which both exchanges were banned in the region.

The exact amount of the fine Binance will pay is yet to be determined, with reports suggesting it could reach $2 million. Aggarwal clarified that despite Binance being registered, compliance procedures are still ongoing until the fine is finalized.

It's reported that other sanctioned platforms like Kraken, Gemini, and Gate.io have begun negotiations with regulatory authorities to comply with India's regulations.

Meanwhile, OKX and Bitstamp have submitted proposals to withdraw from the country. Aggarwal reiterated the importance of anti-money laundering and counter-terrorism financing policies, stressing the need for comprehensive visibility into transactions and institutional arrangements for reporting suspicious activities.

Negotiations and compliance

India's stance on cryptocurrencies remains uncertain, with high taxes imposed in 2022 followed by market volatility causing uncertainty among traders. Despite cryptocurrencies being prioritized during the 2023 G20 presidency, India has been criticized for lacking its own legislation while attempting to push for global consensus. The country has shelved its cryptocurrency bill since 2021, indicating that a decision on its stance is unlikely before mid-2025.

With a large population and growing interest in cryptocurrencies, India has become a lucrative market for cryptocurrency exchanges. It's reported that the country has over 19 million cryptocurrency investors, with a significant proportion aged between 18 and 35. Despite this enthusiasm, the Indian government remains cautious about digital currencies, recently enacting regulations such as a 1% tax on cryptocurrency transactions.

While Binance once dominated the Indian cryptocurrency landscape, regulatory hurdles forced its exit. The anticipated $2 million fine demonstrates a willingness to comply with local laws, albeit at a considerable cost. As the exchange explores the possibility of re-entering India, it will face challenges and opportunities. Additionally, competition from local exchanges and the evolving regulatory framework add complexity to the landscape.