Cryptocurrency Credibility Boost as Binance and KuCoin Secure FIU Approval in India
In a punch in the arm for the cryptocurrency industry in India, Binance and KuCoin have become the first offshore crypto-related entities to receive approval from the country’s anti-money laundering unit, months after being banned for operating illegally.
According to the Financial Intelligence Unit (FIU-IND), which falls under India’s Finance Ministry, both Binance and KuCoin have been registered with the unit, marking a notable shift in credibility for cryptocurrency operations within the nation.
Vivek Aggarwal, who heads FIU-IND, emphasized the importance of collaboration between the industry and regulatory authorities to review compliance guidelines on money laundering laws for virtual digital asset service providers. He stated that such measures are essential to safeguard the Indian economy and enhance the credibility of the cryptocurrency industry.
KuCoin has already resumed operations after paying a penalty of $41,000, making it the first crypto entity to do so. However, Binance has yet to resume operations as it is expected to pay a penalty following a hearing with the FIU. The Economic Times reported that Binance is likely to settle with a $2 million fine.
Aggarwal clarified that while Binance is registered with the FIU, compliance proceedings are ongoing, and the amount of penalty is yet to be decided. He further mentioned that several other platforms, including Kraken, Gemini, and Gate.io, are currently negotiating with regulators, while OKX and Bitstamp have submitted plans to exit the country.
India currently has 48 registered crypto entities under the Prevention of Money Laundering Act, according to Aggarwal. The FIU’s engagement with the press on crypto-related matters comes after officials met representatives of all 48 entities, indicating a new level of transparency and communication in the industry.
The meeting also saw the release of a report titled “Virtual Digital Asset Service Providers: Road to Effective Compliance under PMLA” by the crypto advocacy body, Bharat Web3 Association. Aggarwal emphasized the importance of fostering a regulatory environment that balances innovation with safeguards against money laundering risks.
Regarding the registration process, Aggarwal clarified that offshore entities wishing to register with the FIU do not need to have an office in India but must have a registered principal compliance officer along with their address and other details.
Despite these positive developments, India’s position on crypto remains somewhat ambiguous. The country has yet to enact its own legislation on cryptocurrency, although it made achieving global consensus on framing crypto policy a priority during its G20 presidency in 2023.
The release of the FIU’s report and the registration of Binance and KuCoin signal a significant step forward for the cryptocurrency industry in India, with increased collaboration between regulators and industry players expected to shape the future regulatory landscape.
Digital Assets Desk
