KuCoin has settled a fine of $41,000 while Binance awaits a determined financial penalty post a session with the FIU. These two platforms, previously part of the nine prohibited entities, have now achieved registration with the anti-money laundering unit in India. The regulator views these registrations as a step towards enhancing the credibility within the crypto ecosystem.
Binance
In a significant move, Binance, the leading global cryptocurrency exchange, along with its competitor KuCoin, have emerged as the initial offshore entities related to crypto to gain recognition from India’s anti-money laundering unit, following the ban for their alleged unauthorized operations. The Financial Intelligence Unit (FIU-IND) of the country, overseen by a top official under the Finance Ministry, confirmed the registration of these platforms to CoinDesk. The ban last year encompassed over 9 offshore entities, including Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.
Vivek Aggarwal, the head of FIU-IND, mentioned that this approval signifies a shift in credibility for the crypto sector in the country during a session with several financial journalists. He stated that the unit plans to collaborate with the industry through a working group to assess compliance standards related to anti-money laundering regulations for virtual asset service providers. Aggarwal emphasized the importance of parliamentary and governmental backing to legitimize the industry, highlighting the significance of safeguarding the Indian economy against financial crimes.
KuCoin
KuCoin has already paid the imposed penalty and resumed its operations. On the other hand, Binance is awaiting the finalization of its penalty amount following an ongoing hearing with FIU-IND. Sources close to the matter, as reported by The Economic Times, suggest that Binance might settle for a $2 million fine. Aggarwal clarified that while Binance is registered, the compliance procedures are pending until the penalty amount is determined.
Negotiations have commenced with the regulator for other sanctioned platforms like Kraken, Gemini, and Gate.io. Meanwhile, OKX and Bitstamp have outlined plans to exit the Indian market. Presently, India boasts 48 registered crypto entities as reporting units under the Prevention of Money Laundering Act. The FIU’s recent engagement with the media marks a pivotal moment in the crypto landscape, signifying a step towards transparency and dialogue.
India’s stance on crypto has been somewhat uncertain, characterized by the imposition of stringent taxes and market fluctuations leading traders to move to global exchanges. The country’s endeavor to drive global consensus on crypto policy within the G20 presidency of 2023 has drawn attention, despite the absence of domestic regulatory legislation. The long-awaited crypto bill in India has been postponed, with no clear timeline set for its introduction, fostering an air of uncertainty within the industry.
In conjunction with these developments, the Bharat Web3 Association introduced a comprehensive report titled “Virtual Digital Asset Service Providers: Road to Effective Compliance under PMLA.” Authored by Aggarwal, the report underscores the commitment to crafting a regulatory framework that aligns with innovation while mitigating money laundering risks.
Entities seeking registration with FIU are not mandated to have a physical presence in India, provided they designate a principal compliance officer and furnish requisite details. Aggarwal highlighted the essence of strong AML/CFT protocols for enhanced transaction visibility and monitoring of suspicious activities as paramount objectives for the regulatory framework.
