Originally published on: September 06, 2024
The Financial Intelligence Unit (FIU) in India is in the process of granting approval to two additional offshore crypto exchanges to recommence their operations within the country. This move comes as part of the FIU’s efforts to ensure Anti-Money Laundering (AML) compliance in the Indian crypto market.
Scrutiny of Overseas Crypto Exchanges
The FIU is currently examining requests from four overseas crypto exchanges that had previously been banned for non-compliance with the country’s AML regulations. With Binance and KuCoin already approved for registration, sources suggest that at least two more exchanges may receive the green light to operate in India by the end of the fiscal year 2025.
Enhancing Transaction Visibility and Compliance
The reviving exchanges are expected to undergo a comprehensive review covering transaction visibility, reporting of suspicious activities, and other relevant compliance matters. This meticulous scrutiny by the FIU aims to ensure a more secure and transparent crypto trading environment in India.
Notable Developments and Impact on the Market
Following the FIU’s decision to lift the ban on certain exchanges, the Indian crypto space is poised for significant changes. Raj Kapoor, founder of the India Blockchain Alliance, foresees a boost in market competition, offering Indian investors diversified trading options and reduced dependencies.
Opportunities and Challenges Ahead
As India gears up to shape its regulatory framework for cryptocurrencies, stakeholders eagerly await the Department of Economic Affairs’ consultation paper on cryptocurrency legislation. This pivotal document, expected for release by October, is set to drive discussions around the future of digital currencies in India.
Preparing for Industry Growth
Raj Karkara, COO of ZebPay crypto exchange, emphasizes the importance of fostering an enabling policy environment that supports innovation and growth in the crypto sector. By engaging with industry experts and the public, the government aims to develop well-rounded regulations that cater to the needs of all stakeholders in the cryptocurrency ecosystem.
Tax Regime and Compliance Measures
With the introduction of a tax regime on cryptocurrency transactions in April 2022, India has taken steps to regulate the sector effectively. Measures such as the imposition of a 30% tax on unrealized crypto gains and a 1% tax deduction on crypto transactions indicate the government’s focus on combating money laundering and terrorism financing in the crypto space.
Stay Informed and Engaged
As the landscape of cryptocurrency regulations in India evolves, stakeholders are encouraged to stay informed and actively participate in shaping the future of digital assets in the country. With collaborative efforts between the government and industry players, India’s crypto ecosystem is poised for growth and continued innovation.
