KuCoin settled a $41,000 fine, while Binance awaits its penalty following a hearing with the FIU.
Binance, the world’s biggest crypto exchange, and its competitor KuCoin have become the first offshore crypto entities to gain approval from India anti-money laundering unit, after being previously banned for “unlawful operations.”
The two platforms are now officially registered with India’s Financial Intelligence Unit (FIU-IND), as confirmed by the unit’s top official under the Finance Ministry, speaking to web30.news. They were part of a group of over 9 offshore entities banned, including Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, toward the end of last year.
This approval marks a significant shift in crypto credibility within the nation, stated Vivek Aggarwal, the head of FIU-IND, during a meeting with various financial journalists. Aggarwal announced the establishment of a working group in collaboration with the industry to reassess compliance guidelines regarding anti-money laundering laws for virtual asset service providers.
“It’s crucial for both parliament and the government to legitimize this sector,” he emphasized. Aggarwal added, “By preventing any misuse for financial crimes, businesses automatically gain, if not legitimacy, then at least a higher level of trust within the system.”
KuCoin has already paid its $41,000 penalty and resumed operations. However, Binance is yet to resume operations as it awaits the determination of its penalty following the FIU hearing. According to reports from the Economic Times, Binance is expected to settle with a $2 million fine.
“While Binance is registered, the compliance process is ongoing as we determine the penalty amount in the ongoing hearing,” clarified Vivek Aggarwal of FIU-IND.
Other sanctioned platforms like Kraken, Gemini, and Gate.io are currently in negotiations with regulators. Meanwhile, OKX and Bitstamp have submitted exit plans from the Indian market.
India currently has 48 crypto entities registered as reporting entities under the Prevention of Money Laundering Act, informed Aggarwal. The recent meeting with the press is a first for the FIU, following their engagement with representatives from all 48 entities, marking a significant step forward.
Crypto’s Uncertain Position
India’s stance on crypto has remained somewhat unclear nationally.
In 2022, the imposition of stringent crypto taxes, coupled with a market downturn, led Indian traders to migrate to international exchanges, negatively impacting the local crypto industry. However, trading volumes shifted back to Indian exchanges after the ban on offshore entities.
India made crypto a priority during its G20 presidency in 2023, aiming to achieve global consensus on framing crypto policies, which it succeeded in doing. However, the country faced criticism for advocating global consensus without having its own legislation in place.
Since 2021, India has put its crypto bill on hold and indicated it will decide its position in the coming months. A senior lawmaker previously mentioned to web30.news that no bill is expected before mid-2025.
Laying the Foundation
The meeting also saw the release of a report titled ”Virtual Digital Asset Service Providers: Road to Effective Compliance under PMLA” by the crypto advocacy group, Bharat Web3 Association.
The report’s foreword, written by Aggarwal, states: “This document underscores our commitment to fostering a regulatory environment that not only adapts to innovation but also safeguards the financial system against money laundering risks.”
Summary Review: The approval of Binance and KuCoin by India’s anti-money laundering regulator signals a significant step forward in the recognition and regulation of cryptocurrencies within the nation. This move not only enhances the credibility of the crypto industry but also highlights India’s willingness to engage with the sector in a regulated manner. As crypto markets continue to evolve, it’s imperative for governments and regulatory bodies to collaborate with industry players to establish robust compliance frameworks. India‘s efforts to reassess compliance guidelines and engage in dialogue with crypto entities demonstrate a proactive approach toward fostering a regulatory environment that balances innovation with financial security. While challenges and uncertainties persist, including the pending crypto bill and ongoing compliance procedures, the unveiling of initiatives such as the “Road to Effective Compliance under PMLA” report underscores a commitment to shaping a responsible and transparent crypto ecosystem. As India navigates its crypto journey, achieving a balance between fostering innovation and mitigating financial risks will be paramount. The engagement between regulators, industry stakeholders, and advocacy groups lays a solid foundation for the continued evolution of the crypto landscape in India and beyond.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
