Binance Re-enters India Months After Ban, Faces $86 Million Tax Demand

Jimmy Aki
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Binance, one of the world’s largest cryptocurrency exchanges, is back in India after months of ban. The return comes after Indian anti-money laundering (AML) agencies gave Binance the green light to resume operations.

Binance Takes Decisive Steps to Reestablish Its Presence

While the return of Binance to India could be a good development for the crypto exchange, it is not without challenges. Indian authorities have issued an $86 million tax demand under the Goods and Services Tax (GST), highlighting the complex regulatory environment Binance must navigate.

On August 15, 2024, coinciding with India’s 78th Independence Day, Binance announced its reentry into the Indian market. The company sees this as a fresh start for cryptocurrency adoption in India as it marks its 19th global regulatory milestone. Yet, this fresh start is complicated by past issues.

In December 2023, India’s Financial Intelligence Unit (FIU) issued show-cause notices to several offshore crypto exchanges, including Binance, for allegedly operating illegally in the country. This led to the removal of Binance’s app from the Google Play Store and Apple’s App Store in India.

This happened around the same time the exchange faced issues in other countries such as the $4.3 billion settlement with the U.S. Department of Justice (DoJ) over illicit finance breaches.

Despite the challenges, Binance is showing a clear willingness to comply with Indian regulations with the payment of the $2.25 million fine imposed on the exchange for violating AML regulations.

Moreover, Binance has assured Indian authorities that it will adhere to all tax reporting processes, including the 1% tax deduction at source (TDS) and the flat 30% tax on crypto transactions. The company is also setting up a Financial Crimes Compliance unit to help enforcement agencies investigate crypto-related crimes.
Richard Teng, CEO of Binance, emphasized the importance of aligning with Indian regulations.

He said,
“Our registration with the FIU-IND marks an important milestone in Binance’s journey. Recognizing the vitality and potential of the Indian VDA market, this alignment with Indian regulations allows us to tailor our services for Indian users.”

Experts Weigh in on Binance’s Return

The return of Binance has sparked mixed reactions among industry experts.

Saravanan Pandian, CEO of local cryptocurrency exchange KoinBX, sees this development as a positive signal for India’s digital asset ecosystem. “Binance’s return is a significant and bullish development that signals growing confidence in India’s potential,” Pandian said.

On the other hand, Aravind Chandrasekaran, ex-product lead for OnMeta, expressed concerns about Binance’s operations in India as he stated that “Binance is a hotbed for gray area activities, especially regarding the prevention of money laundering in India.”

The $86 million tax demand adds another layer of complexity to Binance’s re- entry.

The Indian government is still shaping its long-term approach to crypto regulation, and Binance’s compliance could set a precedent for other international exchanges.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.