KuCoin has paid a fine of $41,000, while Binance’s financial penalty is pending determination following a hearing with the FIU.
These two exchanges, along with seven others, were banned in December. However, they have now become the first offshore crypto-related entities to be registered. According to the country’s Financial Intelligence Unit (FIU-IND), which operates under the Finance Ministry, this registration will contribute to enhancing the credibility of the crypto system.
Binance, recognized as the world’s largest cryptocurrency exchange, and its competitor KuCoin, have received approval from India’s anti-money laundering unit for operation, months after being banned for illegal activities.
The approval signifies a significant shift in credibility for the crypto industry in India, as stated by Vivek Aggarwal, head of FIU-IND, during a meeting with financial journalists. Aggarwal announced the establishment of a working group with the industry to review compliance guidelines for virtual digital asset service providers concerning money laundering laws.
He emphasized the importance of parliament and the government’s role in legitimizing the industry, stating that registration acts as a safeguard for the Indian economy against financial crime, thereby adding a degree of credibility to the system.
While KuCoin has resumed operations after paying a penalty, Binance’s operations remain suspended pending the outcome of the hearing with the FIU. It is speculated that Binance may settle with a $2 million fine, according to reports from The Economic Times.
Aggarwal clarified that although Binance is registered, compliance proceedings are ongoing, and the penalty amount is yet to be determined.
Among the other sanctioned platforms, negotiations have commenced with Kraken, Gemini, and Gate.io. Additionally, OKX and Bitstamp have submitted plans to exit the country.
India currently has 48 crypto entities registered as reporting entities under the Prevention of Money Laundering Act, according to Aggarwal. This announcement follows a meeting between FIU officials and representatives of all 48 entities, marking the first time the FIU has engaged with the press on crypto matters.
India’s stance on crypto has remained somewhat ambiguous, with stiff crypto taxes imposed in 2022 and a fluctuating regulatory landscape. However, the country has made it a priority to achieve global consensus on framing crypto policy within the G20 framework.
The event also saw the release of a report titled “Virtual Digital Asset Service Providers: Road to Effective Compliance under PMLA” by the Bharat Web3 Association, with Aggarwal providing the foreword.
Aggarwal outlined the registration process for offshore entities, emphasizing the need for a principal compliance officer but stating that physical offices in India are not required.
He concluded by highlighting the importance of AML/CFT frameworks in ensuring transparency and combating financial crime.
