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Binance’s India Drama Left Behind As Exchange Looks to Claim Back 90% of Indian Business

Last Updated 6 days ago
Shraddha Sharma
Last Updated 6 days ago
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Binance is reportedly making a comeback in India after a previous ban.
  • Source-based media report alleges that Binance is tightening compliance efforts and paying a $2m penalty for re-entry.
  • Binance was in an ownership tussle in the past with the Indian exchange WazirX.

Binance, which reportedly dominated 90% of the Indian crypto market, could be making a comeback. It was sidelined, along with other off-shore exchanges for regulatory compliance earlier in 2024. Sources allege that the exchange is paying a hefty penalty for its return.

Binance Reboot in India

After facing a ban in India in January, Binance could resume operations, as per a source-based local report . The exchange is said to be registering with the Financial Intelligence Unit (FIU) under the finance ministry.

The FIU is the key regulatory body that has been supervising virtual digital assets (VDAs) providers. Foreign exchanges, including the most recent addition of Seychelles-based OKX, have been winding up Indian operations as regulations to continue operations become tighter. Therefore, to regain its footing, Binance has reportedly promised to adhere to relevant laws, including the Prevention of Money Laundering Act (PMLA) and the framework governing VDA taxation. Sources have indicated that the exchange had previously circumvented these regulations, contributing to its initial ban.

Interestingly, Binance reportedly held nearly 90% of the $4 billion Indian crypto market. And with the Indian market projected to grow at the rate of 54.11%  between 2024 and 2032, Binance is aiming at a lion’s share with the comeback.

Regulatory Trouble for Exchange

Domestic exchanges previously pleaded with the regulators to take cognizance of off-shore platforms’ lax approach to tax laws. The practice made it profitable for foreign exchange in relation to domestic businesses. The report finds that the Binance ban profited local exchanges like CoinDCX as users shifted.

CCN reached out to CoinDCX and an Indian industry body called Bharat Web3 Association for comments. Due to the ongoing Token2049 conference, they did not immediately respond to a request for comment.

Amid regulatory adjustments, Binance also dealt with internal disputes with WazirX since 2022. WazirX was thought to be the local arm of Binance after the domestic exchange alleged that the former controlled the WRX token. After a long-standing public spat, then-Binance CEO Changpeng Zhao commented that Binance does not own any shares in Zanmai Labs, the parent entity of WazirX.

WazirX refused to comment on CCN’s request.

Re-Entry in India

Binance’s reported re-entry into the Indian market will face India’s stringent regulatory environment. Binance 2.0 could also possibly receive a cold shoulder from the domestic exchanges after the WazirX spat.

But India is a booming crypto market with a growth rate expected to surpass 50% in the next decade. And it could be an answer to the exchange’s business woes.    

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