In a groundbreaking move, Binance and its rival KuCoin have grabbed the spotlight as the first offshore cryptocurrency entities to get the nod from India’s anti-money laundering watchdog.
This news comes after both platforms faced a ban last year for operating without authorization. But what does this mean for the future of crypto in India? Will Binance follow suit and be back in action soon? Read on to find out the latest developments and what this could signal for the booming Indian crypto market.
After facing a series of legal obstacles, both Binance and KuCoin have successfully made their way back into the Indian market, confirmed by a senior official within the Finance Ministry’s FIU-IND division, tasked with tackling illicit financial activities.
KuCoin has already paid a fine of $41,000 and resumed its services. Meanwhile, Binance’s operations remain paused as they await the conclusion of their compliance proceedings, where the final penalty will be determined.
Last year ended on a challenging note for these platforms, as they were among over nine offshore entities banned from operating in India. However, not all platforms have sailed smoothly. While Kraken, Gemini, and Gate.io have started negotiation processes, OKX and Bitstamp are planning their exit from India.
Despite regulatory challenges, India’s cryptocurrency market has shown remarkable growth. Valued at $73.8 million in 2021, projections suggest it will nearly double by 2025, reaching $123.2 million, with estimations soaring to $241.1 million by 2030. This growth is driven by a growing community of crypto traders, supported by a robust compound annual growth rate (CAGR) of 54.11% from 2024 to 2032, with anticipated market figures surging to $343.5 million in 2024 alone.
What’s Driving It?
The expansion of crypto in India and the proactive stance of the government towards refining crypto regulations are key factors driving this growth. The term “virtual digital assets” (VDAs) has been officially adopted to include cryptocurrencies and non-fungible tokens (NFTs). Amendments in the Information Technology Act of 2000 have mandated a stronger Know Your Customer (KYC) process for new users on crypto exchanges.
Additionally, for an exchange to operate legally, it must not only register with FIU India but also maintain transaction records for a period of five years. The integration into the Prevention of Money Laundering Act of 2002 classifies these exchanges as reporting entities, further tightening the regulatory framework.
Are stricter regulations a necessary evil for healthy crypto growth?
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