Binance’s Return to India Fails Amid PMLA Compliance Hurdles

• Binance has moved to restore Indian access to its mobile application and website.
• However, the Indian government rejected Binance’s request to resume operations.
• Binance needs time to establish procedures to comply with required regulations.

The world’s largest crypto exchange, Binance, is in talks with the Indian government to restore citizens’ access to the Binance mobile application and website. An Indian publishing firm captured this development, citing sources familiar with the matter. 

Per the report, Binance is willing to settle outstanding taxes accumulated as of January 12, when operations were halted. However, it noted that the exchange is unprepared to adhere to the Prevention of Money Laundering Act (PMLA) guidelines.

In particular, Binance sources reportedly stated that the exchange requires time to establish the necessary procedures to comply with the PMLA and Financial Intelligence Unit (FIU) regulations. Consequently, it requested permission to resume operations in the interim period.

In response, the Indian authorities have rejected Binance’s request to resume operations until the company implements the necessary compliance. The statement read:

Compliance with PMLA is paramount. They have been explicitly told that any discussion on resumption of their services in India is only after the government is satisfied with their responses on the notices sent by the FIU.

Earlier, the government blocked nine offshore crypto platforms’ websites and mobile apps. The affected exchanges include Binance, KuCoin, Huobi, OKX, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex. Notably, the government’s step was warranted because these platforms failed to respond to show-cause notices from the FIU.

Meanwhile, the government is collaborating with banks to devise measures against traders who utilize virtual private networks (VPNs) to access the banned platforms.

Data suggested that approximately 4,000 Indian crypto traders are suspected of using VPNs to conduct transactions on Binance rather than transferring their assets to compliant Indian exchanges. It is estimated that nearly $4 billion worth of crypto belonging to Indian traders is stored in offshore wallets.