Crypto Exchanges Binance and KuCoin Back in India’s Game

Story Highlights

• Banned crypto exchanges Binance and KuCoin are back in India after registering with the financial watchdog.
• Both exchanges face penalties for past non-compliance, with Binance potentially paying $2 million.
• India’s crypto future remains uncertain with a delayed crypto bill and a cautious approach despite a large and young investor base.

After a period of exile, cryptocurrency giants Binance and KuCoin have secured registration with India’s Financial Intelligence Unit (FIU). This move signals a shift in India’s stance on crypto, prioritizing regulation over outright bans. KuCoin paid a $41,000 penalty for previous non-compliance, while Binance awaits a decision on theirs, potentially reaching $2 million.

The registrations come after a period of intense scrutiny. In late 2023, the FIU banned nine foreign crypto exchanges, including Binance and KuCoin, for operating illegally. This move aimed to protect India’s economy from financial crimes like money laundering. The recent registrations suggest that these exchanges have addressed the FIU’s concerns and implemented necessary anti-money laundering (AML) and counter-terrorism financing (CFT) policies.

Big BREAKING 🇮🇳

Binance and KuCoin have officially registered with India's Financial Intelligence Unit. pic.twitter.com/DK2OLgny3J

— Sapna Singh (@earnwithsapna) May 10, 2024

India A Lucrative Market with an Uncertain Future

India boasts a massive and enthusiastic crypto investor base, with over 19 million users. This young demographic, largely between 18 and 35 years old, fuels the lucrative potential of the Indian crypto market. However, India’s approach to crypto remains unclear. Despite leading discussions on global crypto regulation during its G20 presidency in 2023, the country lacks its own comprehensive legislation. A crypto bill, introduced in 2021, remains on hold, pushing any definitive decision on crypto’s legality to at least mid-2025.

This uncertainty is further compounded by recent tax regulations. In 2022, the Indian government imposed a 1% tax on crypto transactions, dampening investor sentiment. The hefty fine for Binance underscores the government’s commitment to control while potentially opening doors for re-entry. While Binance regains a foothold, competition from local exchanges and a dynamic regulatory landscape pose significant challenges.

The return of Binance and KuCoin marks a new chapter for India’s crypto story. As the industry evolves, India will have to navigate the delicate balance between fostering innovation and protecting its financial system.