Binance, the globe's largest cryptocurrency exchange, is back in business in India after a seven-month break due to legal complications. This comeback follows the company’s registration as a reporting entity with India’s Financial Intelligence Unit (FIU), a key move required to address previous compliance issues.
Last year, India’s FIU blocked nearly a dozen foreign crypto exchanges, including Binance, Kraken, Kucoin, and Mexc, based on recommendations to ensure compliance with the country’s anti-money laundering and anti-terrorism financing laws. The regulatory clampdown was spurred by local exchanges' complaints about losing market share to noncompliant foreign entities.
With Binance’s platforms now fully operational in India, the company marks its 19th global regulatory milestone. Richard Teng, Binance's CEO, expressed the significance of this achievement: "Our registration with FIU-IND is a crucial step in Binance’s journey. Aligning with Indian regulations not only allows us to serve the local market better but also underscores our commitment to the vibrant Indian VDA landscape."
Despite its potential, India’s cryptocurrency market has lagged behind due to regulatory challenges. Over the past five years, the Reserve Bank of India has pressured financial institutions to sever ties with crypto businesses. Additionally, the government's strict tax policies have dampened local interest in digital currencies. Coinbase, another major player, halted new customer sign-ups in India last year, citing "informal pressure" from the central bank.
These regulatory and fiscal barriers have hindered the growth of India's crypto industry. A recent hack at WazirX, a local exchange and former Binance partner, which resulted in nearly half of its reserves being compromised, further strained the efforts of local entrepreneurs advocating for a more crypto-friendly regulatory environment. With Binance’s renewed operations, the path to a thriving crypto ecosystem in India might just get a little clearer.
