Binance Resumes Operations in India: Cryptocurrency Exchange Reopens After Registering with FIU-IND

Binance, a leading global cryptocurrency exchange, has taken a critical step forward in its return to the Indian landscape by establishing itself as a reporting institution with India’s Financial Intelligence Unit (FIU-IND). This move paves the path for Binance to reengage with the Indian populace by reinstating its digital presence, allowing access to its platform and services through its website and mobile application for users in India.

Exploring the Function of FIU-IND

The FIU-IND occupies an important position in the regulation of transactions involving virtual digital assets (VDAs). It is tasked with ensuring that the trading of these assets complies with the Prevention of Money Laundering Act (PMLA) and tax regulations specific to VDAs. For cryptocurrency platforms to operate within the legal framework of India, registration with the FIU-IND as reporting entities is compulsory, a requirement that supports adherence to anti-money laundering (AML) protocols and fortifies the country’s financial security.

Adherence to Regulation: A Keystone of Binance’s Strategy

The commitment to regulatory compliance was underscored by Binance’s CEO, Richard Teng, who commented on the importance of their FIU-IND registration: “Securing this registration is a pivotal moment in our path forward. We recognize the vibrant potential of the Indian VDA market, and aligning with the nation’s regulations enables us to tailor our offerings to better serve Indian customers.”

Binance, in its strategic relaunch in India, has vowed to pursue a pathway of “responsible growth” while heightening user safety. The exchange is enacting stringent protocols and infrastructures focused on thwarting terrorist financing (CFT) and averting money laundering activities. Binance’s governance framework encompasses thorough identity checks, or Know Your Customer (KYC) processes, alongside an in-house financial crimes compliance (FCC) team. This team assists law enforcement with investigations into financial crimes related to cryptocurrency and strives to bolster the security of the financial ecosystem.

Reflections on Binance’s Previous Exit from India

The re-emergence of Binance in the Indian market follows an eight-month absence. In December 2023, India’s Ministry of Finance issued directives to nine foreign crypto exchanges, including Binance, for their failure to register with FIU-IND and non-compliance with AML regulations. This prompted the FIU-IND to direct the Ministry of Electronics and Information Technology (MeitY) to restrict access to these entities’ websites, which led to the exclusion of Binance from app stores and the blocking of their website in India.

In efforts to rectify the situation, Binance engaged with Indian government representatives, showing a readiness to clear dues and penalties to restore its service status within the country. Indian authorities maintained a firm stance on strict adherence to PMLA rules and other regulatory requirements for Binance to recommence its operations. As a result of compliance measures taken by Binance, including a substantial payment of an INR 18 crore fine in June 2024, the exchange has managed to re-establish its presence in the Indian market successfully.