India’s Financial Intelligence Unit (FIU-India) is reviewing applications from four offshore cryptocurrency exchanges seeking permission to resume operations by March 2025. This move follows the recent lifting of bans on Binance and Kucoin. The review process is aimed at making sure such exchanges are following AML standards regarding transactions and reporting of suspicious activity.
FIU-India has received applications from four offshore exchanges and believes that at least two of the offshore exchanges may get clearance by the end of the financial year 2025 Official source. The review will encompass an evaluation of transaction visibility and suspicious transaction reporting.
FIU-India had previously granted Binance and Kucoin authorization to engage in operations in India as Virtual Asset Service Providers (VASPs). Before continuing with the trading, both exchanges had to resolve non-compliance concerns. Kucoin posted Rs 35.5 lakh (about $43000) to avail the lifting of the ban on their website, while Binance was fined $2.25 million or ₹18.8 crore for not following AML regulation. The Indian government shut down nine more international ones last December by freezing them under the Prevention of Money Laundering Act (PMLA), which aims to ensure transparency against fraud.
Binance, KuCoin Lead as First Foreign Exchanges Registered in India
Both Binance and KuCoin registered with FIU-India on May 10 and became the first foreign-based crypto exchanges to do so. They have also recently enjoyed a successful re-entry, which has further piqued the attention of other international competitors. By June, four other offshore exchanges had shown interest in registering, which shows that there is a willingness in the global market to penetrate the Indian market.
India is emerging as one of the most profitable markets for cryptocurrency exchanges, and companies are earning over $1 billion in crypto-related revenues here. However, regulating the sector still presents significant difficulties.
Currently, any crypto transactions done in India must be charged a TDS fee of 1%, and business profits are charged at 30%. Foreign exchanges must also have a registered compliance officer as FIU-India requires them to conduct their business legally.
