Binance and KuCoin Make a Comeback in India with Regulatory Approval
Binance and KuCoin, two major players in the global cryptocurrency exchange market, have recently made headlines for being the first offshore crypto companies to receive approval from India’s anti-money laundering watchdog. This achievement follows a period of prohibition they faced earlier for operating without authorization in the country.
Regulatory Reconciliation and Resumption
After overcoming legal obstacles, both Binance and KuCoin have successfully re-entered the Indian market, as confirmed by a senior official from the Financial Intelligence Unit of India (FIU-IND), a division of the Finance Ministry dedicated to combating illegal financial activities.
KuCoin has already paid a fine of $41,000 and resumed its services, while Binance is currently awaiting the conclusion of their compliance proceedings to determine their final penalty.
Last year was a challenging period for these platforms, as they were among nine offshore entities banned from operating in India. However, not all platforms have had a smooth journey. While some like Kraken, Gemini, and Gate.io have started negotiations, others like OKX and Bitstamp are planning to exit the Indian market.
Growth Amid Regulation
Despite regulatory hurdles, the cryptocurrency market in India has continued to grow significantly. In 2021, the market was valued at $73.8 million and is expected to almost double by 2025, reaching $123.2 million. By 2030, it could reach $241.1 million. The increasing number of crypto traders reflects a strong compound annual growth rate (CAGR) of 54.11% from 2024 to 2032, with the market potentially reaching $343.5 million in 2024 alone.
The expansion of cryptocurrencies in India, along with the government’s proactive approach to refining crypto regulations, are key drivers of this growth. The term “virtual digital assets” (VDAs) now officially includes cryptocurrencies and non-fungible tokens (NFTs). Amendments in the Information Technology Act of 2000 have mandated a stricter Know Your Customer (KYC) process for new users on crypto exchanges.
Furthermore, for an exchange to operate legally, it must register with FIU India and maintain transaction records for five years. Being classified as reporting entities under the Prevention of Money Laundering Act of 2002 further strengthens the regulatory framework for these exchanges.
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