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Cheering for Cryptocurrency Players: Binance May Soon Set Up Store in India and Complete Initial Registration
The Financial Intelligence Unit-India (FIU-India), the national agency responsible for analyzing suspicious financial transactions, will soon lift the ban on the world’s largest cryptocurrency exchange Binance after completing due diligence, a senior official said government.
FIU-India lifted the ban on another offshore cryptocurrency exchange, KuCoin, in March after imposing a fine of Rs 34.5 lakh.
Vivek Aggarwal, director of FIU-IND and additional secretary of the Department of Revenue, said in his first interaction with the media that proceedings on Binance are still ongoing as the penalty is yet to be decided.
“Binance’s operations have not yet resumed and the size of the fine has yet to be decided. To date, Binance has completed its initial registration with FIU-IND. Its sanctions and compliance procedures are still ongoing,” Aggarwal added, speaking at a seminar conducted by industry body Bharat Web3 Association (BWA) in New Delhi on May 10.
Binance’s registration comes hot on the heels of rival KuCoin’s registration in March. Meanwhile, OKX has decided to discontinue its services in India from April 30.
In December 2023, it was found that around nine offshore exchanges, including KuCoin, Binance, OKX, Houbi, were not registered under FIU-IND and were not aligned with the provisions of the Prevention of Money Laundering Act (PMLA), 2002 .
The nine entities are Binance, Kucoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex.
Following this, the government had ordered URLs of these exchanges to be blocked in India in January. Their apps have also been removed from the Apple and Google app stores.
Virtual digital asset service providers, whether operating within or outside India, involved in activities such as currency exchanges from virtual digital assets to fiat currencies, transfers of virtual digital assets, custody or administration of virtual digital assets or facilitating control over virtual digital assets, they must register with FIU India as a “reporting entity”. They are obliged to comply with the requirements set out in the Prevention of Money Laundering Act (PMLA) 2002.
Last month, Changpeng Zhao, former CEO of Binance, was sentenced to four months in prison on Tuesday after pleading guilty to violating US anti-money laundering laws at the world’s largest cryptocurrency exchange.
Once considered the most powerful figure in the cryptocurrency industry, Zhao, known as “CZ,” is the second major cryptocurrency kingpin to be sentenced to prison.
It was also much lighter than the 25 years behind bars Sam Bankman-Fried received in March for stealing $8 billion from customers of his now-bankrupt FTX exchange. Bankman-Fried is appealing her conviction and sentence, Reuters reported.
At the India Today conclave held recently, Union Finance Minister Nirmala Sitharaman highlighted the dangers associated with unregulated cryptocurrencies. She highlighted the risk of illicit activities such as terrorist and drug financing due to inconsistent regulation across nations.
New Delhi Declaration on Cryptocurrencies
During its presidency of the G20, India managed to gather consensus on creating a global regulatory framework for cryptocurrencies.
G20 countries have endorsed the Financial Stability Board’s (FSB) high-level recommendations for the regulation, supervision and control of cryptocurrency activities and markets and global stablecoin arrangements.
and called for the rapid implementation of the Crypto-Asset Reporting Framework (CARF) and changes to the “Common Reporting Standard” (CRS).
The CARF provides for the reporting of tax information relating to transactions in crypto assets in a standardized manner with a view to the automatic exchange of such information with the taxpayers’ jurisdictions of residence on an annual basis. Now, crypto transactions made by Indians on crypto exchanges domiciled abroad will come under the ambit of the Automatic Information Exchange Protocol under the CARF, and as such it will no longer be possible to hide or conceal such crypto transactions.
The price of Bitcoin drops
The price of bitcoin (BTC) fell sharply in the U.S. morning hours of May 10, reversing a move that had seen the world’s largest cryptocurrency rise as high as $63,500. In a reminiscence that evokes bittersweet memories, Bitcoin appears to be taking a step back, reaching trading levels we haven’t seen since 2014.
As good an excuse as any to serve as a catalyst were disappointing US economic data and hawkish comments from Dallas Fed President Lori Logan. The University of Michigan consumer confidence survey for May fell to 67.4 from 77.2 previously. That missed economists’ forecasts for 76.0 by a mile. Perhaps most disturbingly, one-year inflation expectations rose to 3.5% from 3.2% previously and against forecasts for 3.2%. It was just a week ago that Federal Reserve Chairman Jerome Powell scoffed at concerns about stagflation, saying he saw neither “stag” nor “flation.”