Binance Seeks to Resume Service in India by Complying With PMLA Guidelines

Table of Contents

• Unwilling to Comply With AML Regulations
• Government Crackdown on Non-compliant Exchanges
• Full Compliance Needed for Service Resumption
• Outcome Still Uncertain

Cryptocurrency exchange Binance is engaged in discussions with the Indian government to regain access to its mobile app and website in the country following its delisting from Apple’s India app store.

Unwilling to Comply With AML Regulations

While Binance is prepared to pay taxes and penalties, it is currently unwilling to comply with the Prevention of Money Laundering Act (PMLA) guidelines, according to reports. The Indian government is insisting on full compliance with local legislation, including PMLA, and has denied Binance’s request for temporary operation.

Government Crackdown on Non-compliant Exchanges

The government is working with banks to take action against traders using VPNs to access Binance and prevent illegal crypto trades. India’s Financial Intelligence Unit (FIU) issued Show Cause Notices to several cryptocurrency exchanges under PMLA on December 28, but non-compliant URLs remain functional due to incomplete paperwork.

Full Compliance Needed for Service Resumption

Discussions on Binance’s service resumption in India are contingent on satisfactory responses to FIU notices. Banks are collaborating with the government to stop traders using VPNs to access foreign exchanges like Binance. The FIU requires exchanges to report large trades, perform KYC checks, and identify suspicious patterns.

Outcome Still Uncertain

Potential workarounds for Binance include setting up an Indian entity but this may not meet FIU requirements. Binance and similar platforms may face retrospective taxes from the Indian Income Tax Department. The government has implemented a 1% TDS on virtual asset transfers since July 2022 and a 30% tax on crypto profits since April 2022.

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