Kelvin Daminabo
India’s cryptocurrency market is poised for a significant rebound as four international exchanges have requested permission from the Financial Intelligence Unit (FIU) to recommence their operations in the country. This development follows the recent approvals granted to global exchanges Binance and KuCoin, enabling them to resume activities in India after addressing prior compliance issues.
The new petitions suggest an increasing interest in India’s cryptocurrency market, which has faced strict regulations in recent times. The FIU is actively working to incorporate the crypto industry into the country’s financial system, requiring Know Your Customer (KYC) verifications and FIU registration for all Virtual Asset Service Providers (VASPs) operating in India.
The approval of Binance and KuCoin signals a positive turn, with Binance anticipated to pay a $2 million fine to settle its obligations. In contrast, KuCoin has resolved its non-compliance concerns with a penalty of $34.5 lakh (approximately $41,200). The lifting of the ban on KuCoin’s platforms in India clears the path for the exchange to restart its services in the country.
This development holds significance, especially considering the ban imposed on various other crypto exchanges like Huobi, Kraken, (link unavailable), Bittrex, Bitstamp, MEXC Global, and Bitfinex last year, which had a detrimental impact on the Indian cryptocurrency sector, forcing traders to seek alternatives abroad.
India’s efforts to regulate the cryptocurrency landscape aim to establish a monitoring mechanism and integrate the sector into its existing financial infrastructure. By requiring FIU registration and compliance with the Prevention of Money Laundering Act (PMLA), India aims to ensure that cryptocurrency transactions are conducted securely and transparently.
Binance’s recent decision to discontinue cash payments for cryptocurrency transactions between Indian users is perceived as a move towards regulatory compliance and reputation enhancement. While this move limits a previously available payment option for crypto transactions, it underscores the exchange’s dedication to operating within Indian regulatory constraints.
With the imminent return of international exchanges to India’s cryptocurrency market, there is an anticipation for increased liquidity and trading volume in the industry. With 46 registered crypto entities already active in India, approvals for KuCoin and Binance would raise the tally to 48. The entry of new participants is expected to intensify competition and drive innovation in the sector.
The resurgence of offshore cryptocurrency exchanges in India heralds a new era for the country’s crypto landscape. As regulations continue to progress, India’s endeavors to integrate the crypto industry into its financial system are likely to shape the future of cryptocurrency transactions within the country. With heightened scrutiny and oversight, India’s cryptocurrency market is primed for expansion, and the inclusion of new players is anticipated to inject fresh vitality into the sector.