In a notable shift within its financial regulatory framework, India has reopened its doors to offshore cryptocurrency exchanges, with Binance and KuCoin leading the way to secure approvals from India’s Financial Intelligence Unit (FIU-IND). This development is poised to significantly alter the landscape for cryptocurrencies in India.
After a challenging period marked by bans due to alleged non-compliance with local laws, these major exchanges have now successfully navigated the regulatory hurdles, signaling a fresh start in a market valued at over $260 billion.
Binance and KuCoin’s re-entry into the Indian market comes after months of rigorous scrutiny and adjustments to meet the demands of Indian regulators. KuCoin has taken proactive steps by settling a $41,000 penalty, which has facilitated a swift resumption of its services.
Binance, while currently registered, is still in the process of finalizing its compliance procedures, according to the sources.
Crypto context in India
These efforts reflect a broader trend of increasing regulatory oversight within India’s cryptocurrency sector. The FIU has registered a total of 48 crypto firms under the Prevention of Money Laundering Act, enhancing the legal framework governing digital assets in India.
This includes a historic meeting with all registered entities, aimed at reinforcing compliance and cooperation between the crypto industry and regulatory bodies.
The backdrop to these developments includes a January ban on nine major offshore cryptocurrency platforms, such as Binance and KuCoin, which were blocked from operating in India due to compliance failures.
Subsequently, their applications were removed from major app stores, significantly restricting access for Indian users. While some platforms, like Bitstamp and OKX, have ceased operations in India, others, including Gate.io and Kraken, are still negotiating their status with the FIU.
The future of crypto in India
The reopening of India’s market to these platforms is timely, as a recent report by Chainalysis ranks the Indian crypto market as the world’s second-largest, with an inflow of $260 billion in cryptocurrencies from July 2022 to June 2023. This robust market potential , coupled with renewed regulatory clarity , could set the stage for a thriving crypto economy in India.
The FIU’s willingness to engage in open dialogue and adapt regulatory measures reflects a forward-thinking approach to cryptocurrency regulation in India. This could potentially lead to increased investments and foster innovation in the sector, supporting growth in one of the world’s most vibrant digital asset markets.
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