India’s Financial Intelligence Unit (FIU) has received petitions from four offshore cryptocurrency exchanges seeking to resume operations in the Indian market. This comes after global exchanges Binance and KuCoin were recently approved to restart their activities in the country.
Resuming Operations After Compliance
According to a June 14 report from Business Standard, a senior government official disclosed that four additional crypto exchanges have requested permission to re-enter the Indian market. This follows the lifting of bans on Binance and KuCoin, which were previously prohibited for violating anti-money laundering policies.
KuCoin resolved its non-compliance issues by paying a penalty of ₹34.5 lakh (around $41,200), allowing it to resume operations in India. Binance, on the other hand, is still settling its liabilities and is expected to pay a $2 million fine. “We expect them to go live very soon,” the official noted, although the identities of the four new applicants remain undisclosed.
Impact on the Indian Crypto Industry
India currently has 46 registered crypto companies, with the approvals of KuCoin and Binance expected to increase this number to 48. Last year, several major exchanges, including Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, were banned, significantly impacting the Indian cryptocurrency industry and driving many traders to use foreign exchanges.
Regulatory Compliance and Market Integration
Recently, Binance ceased allowing cash payments for cryptocurrency transactions in India to comply with local regulations and enhance its market reputation, despite limiting a previously available payment method.
India has made concerted efforts to integrate the cryptocurrency industry into its banking system. Last year, the government-mandated cryptocurrency companies collected Know Your Customer (KYC) details and registered with the FIU. These rules apply to all Virtual Asset Service Providers (VASPs) operating in India, regardless of their physical location.
By requiring FIU registration and adherence to the Prevention of Money Laundering Act (PMLA), India aims to integrate the crypto sector into its existing financial system, establishing a robust regulatory and monitoring framework. This move is expected to provide a more secure and compliant environment for cryptocurrency operations in the country.
