Four offshore crypto exchanges eye return to Indian market

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

Four crypto exchanges have sought permission to start operating in India once again, a senior government official said, according to a June 14 report by local news outlet Business Standard.

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

Both exchanges were previously banned for operating illegally against anti-money laundering policies in India.

KuCoin resolved previous incompatibility issues with a penalty of ₹ 34.5 lakh (approximately $41,200), following which the ban on websites in India was lifted.

On the other hand, Binance is still in the process of fulfilling its obligations and is expected to pay a penalty of $ 2 million.

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

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

There are currently 46 registered crypto companies in India, and with the approvals of Kucoin and Binance, this number is expected to increase to 48.

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

Recently, Binance stopped allowing cash payments for cryptocurrency transactions between users in India. The purpose of this decision is to comply with regulations and improve market reputation, although it limits the previously available payment method for crypto transactions (bank transfer instead of cash).

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

Last year, the government required cryptocurrency companies to collect Know Your Customer (KYC) details and register with the Financial Intelligence Unit.

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

By making Financial Intelligence Unit registration and compliance with the Prevention of Money Laundering Act (PMLA) mandatory, India aims to integrate the crypto sector into its existing financial system and create a regulatory and monitoring framework.