Four offshore crypto exchanges eye return to Indian market

India’s financial watchdog, the Financial Intelligence Unit (FIU), has received new petitions from offshore cryptocurrency exchanges seeking to resume operations in India.

According to a June 14 report from local news outlet Business Standard, a senior government official told the outlet that four additional crypto exchanges have requested permission to begin operations once again in India.

The fresh request comes after global crypto exchanges Binance and KuCoin were approved by the financial regulator to restart their operations in India.

Both of the exchanges had been previously banned for operating illegally against anti-money laundering policies in India.

KuCoin has resolved the previous non-compliance issues with a penalty of $34.5 lakh (around $41,200), following which the ban on its websites in India had been lifted.

On the other hand, Binance is still in the process of settling its liabilities and is expected to pay a $2 million fine.

“We expect them to go live very soon,” the official said.

The official did not reveal the identities of the four new applicants.

India currently has 46 registered crypto companies, with Kucoin and Binance’s approvals set to bring the total to 48.

Last year, several other crypto exchanges, including Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, were banned. This negatively impacted the Indian cryptocurrency industry and drove many traders to foreign exchanges.

Recently, Binance stopped permitting cash payments for cryptocurrency transactions between users in India. This decision is intended to comply with regulations and enhance its market reputation despite limiting a previously available payment method (cash versus bank transfer) for crypto transactions.

India has been making attempts to integrate the cryptocurrency industry into its banking system.

Last year, the government demanded that cryptocurrency companies collect Know Your Customer (KYC) details and register with the FIU.

These rules apply to all Virtual Asset Service Providers (VASPs) operating in India, regardless of physical location.

By mandating FIU registration and adherence to the Prevention of Money Laundering Act (PMLA), India seeks to integrate the crypto sector into its existing financial system and establish a regulatory and monitoring framework.