As Binance gears up to re-launch its services, it appears that the exchange is fully prepared to cover all its tracks.
Binance, the world’s largest cryptocurrency exchange, is set to make a return to India after agreeing to pay a $2 million penalty. The decision, as reported by India’s Economic Times, is in line with its efforts to get right back into the fast-evolving Indian market. Therefore, the penalty is only one of many other requirements that the exchange must fulfill to comply with India’s stringent financial regulations.
Binance’s Second Coming to India
Binance’s exit from India was a direct consequence of the government’s crackdown on crypto exchanges that did not comply with the Financial Intelligence Unit (FIU) guidelines and the Prevention of Money Laundering Act (PMLA). The exchange, alongside several others, was banned from India in January, meaning that its operations were suspended in one of the world’s most promising crypto markets.
The crackdown was a major setback for Binance, which at the time held the Indian crypto market by the neck. For clarity, the exchange accounted for approximately 90% of all crypto holdings belonging to Indian investors. That is according to the Economic Times, which claims the holdings were estimated at around $4 billion.
Now, however, Binance may have indicated its readiness to adhere to the local laws and regulations with the penalty payment. By settling the $2 million fine, Binance is expected to resume operations as a compliant FIU-registered entity.
What to Expect
This move is expected to significantly toggle with the market dynamics. That is with Binance’s superior technology and liquidity being thrown into the mix. Binance’s re-entry also means that it is ready to face the previous concerns being raised over tax leaks and non-compliance with the 1% tax deducted at source (TDS) that is applicable on registered exchanges.
Recall that, in the past, the platform has faced criticism over its dominance of the Indian market. Critics claimed that its dominance was because of tax gaps that allowed investors to trade on it without the mandated taxes.
As Binance gears up to re-launch its services, it appears that the exchange is fully prepared to cover all its tracks. This means that it will attempt to be fully compliant on all fronts. Especially with the VDA taxation framework, which it was previously accused of violating.
Interestingly, the exchange’s return is a potential advert for India. That is in the sense that it indicates to the global crypto community that India is not against innovation. However, the country will only be open to doing business under the condition of full legal compliance.
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