Binance To Re-Enter India After $2M Penalty, Pledges Compliance

Crypto exchange Binance is on the brink of re-entering the Indian market after a hiatus enforced by regulatory issues.

What Happened: Having faced a ban in January, the exchange is now preparing to operate again by settling a $2 million penalty, according to insiders familiar with the situation, The Economic Times reported.

Benzinga has reached out to Binance for a comment.

The exchange, which was previously accused of flouting several compliance requirements, including the Prevention of Money Laundering Act (PMLA) and taxation norms applicable to Virtual Digital Assets (VDA), is now set to adhere strictly to these guidelines.

A source involved in the regulatory discussions shared that Binance “had been sloppily flouting” these rules before the ban.

India’s financial regulators have maintained a steadfast position that all international cryptocurrency platforms must fully comply with national laws to operate within its borders.

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“It is unfortunate that it took more than two years for Binance to realize there is no room for negotiations, and no global powerhouse can command special treatment, especially at the cost of exposing the country's financial system to vulnerabilities,” an official stated.

Despite these strong statements, the exact figure of the $2 million penalty and the rationale behind its calculation remain unconfirmed by official sources.

Before its ban, Binance dominated the Indian market, holding approximately 90% of the country’s estimated $4 billion in crypto assets.

The platform’s significant market share was largely due to its avoidance of the 1% Tax Deducted at Source (TDS), which is mandatory for registered exchanges in India.

This non-compliance facilitated easier trading conditions but also led to substantial tax losses for the government.

The reintroduction of Binance to India is not just a corporate move but a strategic one that aligns with global regulatory trends where nations like the US, the UK, and Hong Kong are integrating crypto-backed securities into traditional financial markets.

Binance plans to establish a robust local presence, including a dedicated India team and localized payment options, aiming to contribute actively to the Indian blockchain ecosystem.

What’s Next: These topics are expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

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