Binance and KuCoin Re-enter India after Gaining Regulatory Approval
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Binance, the leading cryptocurrency exchange globally, and its competitor KuCoin has made headlines as the first offshore crypto company to secure approval from India’s anti-money laundering watchdog. This development comes several months after they faced prohibition for unauthorized operations within the country.
Regulatory Reconciliation and Resumption
After a tumultuous period of legal barriers, both Binance and KuCoin have navigated their way back into the Indian market, as confirmed by a senior official from the unit. FIU-IND, a segment of the Finance Ministry, is used in combating illicit financial activities.
KuCoin has already paid a fine of $41,000 and resumed its services. Meanwhile, Binance’s operations remain paused as they await the conclusion of their compliance proceedings, where the final penalty will be determined.
Last year ended on a challenging note for these platforms, as they were among over nine offshore entities banned from operating in India. However, not all platforms have sailed smoothly. While Kraken, Gemini, and Gate.io have started negotiation processes, OKX and Bitstamp are planning their exit from India.
Growth Amid Regulation
Despite these regulatory challenges, the cryptocurrency market in India has seen some serious growth. In 2021, the market was valued at $73.8 million and is projected to nearly double by 2025, reaching $123.2 million. By 2030, it could swell to $241.1 million. The steady increase in the number of crypto traders reflects a strong compound annual growth rate (CAGR) of 54.11% from 2024 to 2032, with the market potentially getting to $343.5 million in 2024 alone.
The expansion of crypto in India and the proactive stance of the government towards refining crypto regulations are key factors driving this growth. The term “virtual digital assets” (VDAs) has been officially adopted to include cryptocurrencies and non-fungible tokens (NFTs). Amendments in the Information Technology Act of 2000 have mandated a stronger Know Your Customer (KYC) process for new users on crypto exchanges.
Additionally, for an exchange to operate legally, it must not only register with FIU India but also maintain transaction records for a period of five years. The integration into the Prevention of Money Laundering Act of 2002 classifies these exchanges as reporting entities, further tightening the regulatory framework.
