Binance, the world’s largest cryptocurrency exchange, has reentered the Indian market under the shadow of an $86 million tax demand and heightened regulatory scrutiny. The company, which had faced a ban earlier this year, is now committed to complying with India’s stringent financial regulations.
Binance’s return follows a series of regulatory challenges that began in December 2023, when India’s Financial Intelligence Unit (FIU) flagged the exchange and other offshore platforms for unauthorized operations. This led to the removal of Binance’s app from the Google Play Store and Apple App Store in India and the blocking of its URLs.
The core issue was Binance’s failure to register as a “reporting entity,” allowing users to bypass Indian tax obligations, including the 1% Tax Deducted at Source (TDS) and a 30% tax on crypto transactions. This oversight resulted in significant underreported earnings, triggering the hefty tax demand.
In response, Binance has paid a $2.25 million fine imposed by the FIU for violations of anti-money laundering (AML) regulations. The company has also registered as a reporting entity with the FIU, signaling its commitment to adhering to India’s regulatory framework. Binance has pledged to maintain rigorous AML and Countering the Financing of Terrorism (CFT) controls and is establishing a Financial Crimes Compliance unit to aid in combating crypto-related crimes.
The exchange’s reentry, coinciding with India’s 78th Independence Day, marks a significant step in its efforts to restore trust and operate within India’s rapidly expanding digital economy. Binance’s renewed focus on compliance and transparency aims to align with global standards while navigating the complexities of the Indian market.
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