Last year in December Financial Intelligence Unit in India had blocked url for nine international exchanges. This action was taken by the government authority after issuing the notice to these exchanges to get registered in India and get complied as per the guidelines. No exchange turned up after the notice and finally, the FIU had to block the url for these exchanges. Binance was also one of the exchanges in the list that got blocked in India. Out of these 9 crypto exchanges, Kucoin is the first one that got registered in India after paying the penalty.
Now Binance is the second exchange in the list that is following the process to get registered in India. India is a bigger cryptocurrency market and this is why these leading exchanges are not ignoring the potential in this market and possibly because of that, they are trying to get registered in the Indian market so that they can serve the users in the Indian cryptocurrency space.
As part of the registration process, the exchange has to pay the penalty and now FIU has penalized Binance for $2.25 million and this is for the violation of anti-money laundering rules. This penalty amounts to Rs 18.82 crore in INR currency and this is a big amount but considering what volume Binance has raised this seems ok. Now once this penalty amount is paid then Binance will be able to serve Indian users as per the FIU guidelines. They should also be announcing it soon hopefully and they will be making some changes in the system as well. In India, every sell transaction attracts 1% TDS which is a mechanism to track the transaction and this amount needs to be deducted by the exchange. The Kucoin exchnage has already implemented it and Binance should be doing the same as well.
Binance is a leading international crypto exchnage and people prefer to use this as they get more coins and a bigger volume on their platform. Now once this process is complete then Indian users will be able to use the exchnage. Currently, mobile applications in working in India but the web URL is still blocked and not accessible. VPN can be the solution to access the website but this is not recommended by the exchnage itself as their system tracks it as suspicious usage and blocks the account.
Undoubtedly this is a bigger exchange and because of that it has a massive user base and once it is registered in the Indian market then it would be easy for the Indian users to use their chain without worrying about compliance. But there is a crash that whoever has not been following the tax law in the country must be following the same now since every transaction will be tracked and users will be required to pay the applicable taxes accordingly. After this registration process, it will also be competitive for the Indian exchanges because now they will have to provide the best of their services to compete in the market with such a big player. If they will not be providing the best of services to today's users then it will surely affect their business since it will be kind of mandatory for them to compete in the market if they are serious about the business and want to have a better stake in the market.
I think that this is good news for the Indian news because they will be getting the option to use this exchange which is great for many reasons. This will also create a competitive environment for the local exchanges in the country which means better services will be provided to the users. Some Indian exchanges are not doing good and they have to improve themselves after this else they will lose the user base because nobody wants to use the exchange which is not able to serve according to the market standard. I'm looking forward to seeing how this turns up in the Indian market and if still, this exchange will still get the user base they have before and after the tax rules implementation.
Thank you
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