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Financial Intelligence Unit authorizes Binance and Kucoin to become virtual asset service providers
That of the Indian government Financial Intelligence Unit (UIF) approved offshore applications cryptocurrency exchanges Binance e Kucoin to record them as Virtual asset service providers (VASP) to trading Indiasaid a senior government official.
Kucoin paid a fine of Rs 35.5 lakh for past non-compliance and the ban on its websites was lifted. Meanwhile, the amount of Binance’s liabilities is still being calculated, he said.
“AS Kucoin AND Binance I signed up with FIU India,” Vivek Aggarwal, director of FIU-IND, told reporters on Friday. “We now have full visibility into the transactions we need and the STR (suspicious transaction reporting) process will begin soon.”
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ET was the first to report in the April 18 edition that Binance, the world’s largest cryptocurrency exchange banned by the government in January, would be ready to return to India by paying a fine of around $2 million. Aggarwal, however, did not confirm the news and said calculations were still being done. He added this FIU guidelines they do not require offshore entities to register a separate business in India, but “there shall be a principal compliance officer who is registered with the FIU, India, and whose address and details are available to the FIU for interaction with”. individual investors trading illegally on offshore platforms and evading taxes for nearly two years before the ban, the official said such transactions need to be studied. “If the platform operates illegally, the investors also operate illegally. We need to see whether a legitimate transaction has taken place, where the money comes from, whether it goes through a banking channel and whether it is declared in the tax return of the taxpayer concerned,” he said.
In January, Binance was among the nine Offshore cryptocurrency platformsnamely, Kucoin, Huobi, OKX, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex will not be able to operate in India through web addresses and mobile applications. The government’s action was a response to the platforms’ failure to comply with UIF and anti-money laundering guidelines.
Of these, Bitstamp and OKX have concluded operations in India, while Gate.io and Kraken are still in talks with the FIU, Aggarwal said. Others didn’t respond to us, he added.
The FIU, tasked with overseeing virtual digital asset (VDA) trading, will now have 47 registered entities engaged in trading or managing crypto assets in India.
Regarding the debate on the legitimacy of cryptocurrency trading in India, Aggarwal said that legitimacy comes from licensing, while FIU registration is aimed at safeguarding the financial security of the country.
“This is a debate that has been going on since TDS was imposed on crypto transactions. The same debate occurred when the AML-CFT framework was implemented. So that piece is still missing.”
“I would say that if any business was protected from financial crime, then automatically, if not legitimacy, then there would be at least a little more credibility in the system,” he said.
FIU along with industry players will set up a working group to develop self-regulatory guidelines to ensure growth of VDA activities in India and derive best practices from global regulators.