The Financial Intelligence Unit of India (FIU-IND) revealed on May 10 that Binance and KuCoin successfully registered with the regulatory body on May 10.
It should be noted that these two exchanges were among several offshore entities that were banned last year, which included Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.
Crypto Exchanges Gain Credibility in India
Vivek Aggarwal, the head of FIU-IND, said the approval marks a credibility shift for the cryptocurrency industry within the country.
Aggarwal said that the unit plans to establish a working group in collaboration with the industry to review compliance guidelines related to anti-money laundering laws for virtual digital asset service providers.
According to Aggarwal, the legitimacy and credibility of the industry lie in the hands of the parliament and the government as a whole.
JUST IN: Binance and Kucoin to re-launch in India after becoming the first off-shore crypto exchanges to be registered with the Financial Intelligence Unit pic.twitter.com/qi9bjRPqX1
— Radar (@RadarHits) May 10, 2024
He believes that safeguarding the Indian economy and preventing financial crimes can help businesses operating in the cryptocurrency sector gain more credibility and legitimacy within the system.
KuCoin, the first crypto entity to pay the penalty amounting to $41,000, has already resumed its operations.
On the other hand, Binance is yet to resume its operations as it is expected to settle its penalty after a hearing with the FIU.
According to sources familiar with the matter cited by The Economic Times, Binance is likely to face a $2 million fine.
Prior to its ban, Binance reportedly held a dominant market share, accounting for nearly 90% of the estimated $4b in cryptocurrency holdings amongst Indian citizens.
Negotiations have commenced between the regulator and other sanctioned platforms such as Kraken, Gemini, and Gate.io.
Meanwhile, OKX and Bitstamp have submitted plans to exit the Indian market.
Binance, KuCoin and 46 Other Crypto Entities Registered in India
Aggarwal revealed that a total of 48 crypto entities are now registered as reporting entities under India’s Prevention of Money Laundering Act.
The meeting with financial journalists was the first official interaction between the FIU and the crypto industry.
It followed a prior meeting between Aggarwal and other FIU officials with representatives of all 48 entities.
India’s stance on cryptocurrencies has been somewhat ambiguous. The imposition of strict crypto taxes in 2022 and the crypto market downturn led Indian traders to switch to international exchanges, negatively impacting the local crypto industry.
Trading volumes shifted back to Indian exchanges after the ban on offshore entities, however.
India has made it a priority to achieve global consensus on framing crypto policies as part of its G20 presidency in 2023.
The country successfully obtained agreement from all G20 members on global guidelines.
India faced criticism for pushing for global consensus without having its own legislation in place, however.
The Indian government has kept a crypto bill on hold since 2021 and is expected to decide its position in the coming months.
A senior lawmaker previously mentioned that the bill is unlikely to be introduced before mid-2025.
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