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Binance and KuCoin Partner with India’s Financial Intelligence Unit as Crypto Reputation Grows

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India’s FIU Approves Binance and KuCoin as First Offshore Crypto Entities

India’s anti-money laundering unit has approved offshore crypto entities Binance and KuCoin, marking a significant shift in credibility for the crypto industry in the nation. The two exchanges were among nine offshore entities banned last year, including big names like Huobi, Kraken, and Bitfinex.

Vivek Aggarwal, head of FIU-IND, emphasized the importance of safeguarding the Indian economy from financial crime, stating that the registrations act as a step towards legitimacy and credibility for the industry. KuCoin has already paid a penalty of $41,000 and resumed operations, while Binance is expected to settle with a $2 million fine after a hearing with the FIU.

Other sanctioned platforms like Kraken, Gemini, and Gate.io are in negotiations with the regulator, while OKX and Bitstamp have submitted plans to exit the country. India now has 48 crypto entities registered under the Prevention of Money Laundering Act, with the FIU engaging with the press for the first time on the topic.

The country’s stance on crypto has been somewhat ambiguous, with the imposition of stiff taxes in 2022 and a shift in trading volumes to international exchanges following the ban on offshore entities. India made achieving global consensus on crypto policy a priority during its G20 presidency in 2023, despite criticism for pushing global guidelines without having its own legislation in place.

The unveiling of a report by the Bharat Web3 Association titled “Virtual Digital Asset Service Providers: Road to Effective Compliance under PMLA” underscores the commitment to fostering a regulatory environment that balances innovation with financial system security. Offshore entities seeking registration with the FIU must have a principal compliance officer but do not need to have an office in India.

Aggarwal highlighted the importance of AML/CFT compliance in ensuring full visibility of transactions and reporting of suspicious activities. The updates on the approval of Binance and KuCoin, along with regulatory developments, signal a new chapter for crypto in India.

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