India’s financial watchdog, the Financial Intelligence Unit (FIU), has recently received new requests from offshore cryptocurrency exchanges looking to re-enter the Indian market. This news comes after global exchanges Binance and KuCoin were given approval to resume their operations in India.
KuCoin, after resolving previous compliance issues, paid a penalty of $34.5 lakh (around $41,200), resulting in the ban on its websites in India being lifted. On the other hand, Binance is still in the process of settling its liabilities and is expected to pay a $2 million fine before going live in India.
With the addition of KuCoin and Binance, the total number of registered crypto companies in India is set to reach 48. Last year, several exchanges were banned in India, causing a negative impact on the local cryptocurrency industry and prompting traders to seek services from foreign exchanges.
In an effort to comply with regulations and improve its market reputation, Binance recently stopped allowing cash payments for cryptocurrency transactions among users in India. This move is part of India’s broader strategy to integrate the cryptocurrency industry into its banking system.
The Indian government has been pushing for cryptocurrency companies to collect Know Your Customer (KYC) details and register with the FIU. These requirements apply to all Virtual Asset Service Providers (VASPs) operating in India, regardless of their physical location. By enforcing FIU registration and compliance with the Prevention of Money Laundering Act (PMLA), India aims to bring the crypto sector under its regulatory umbrella and establish a monitoring framework.