Binance, Kucoin Get FIU Approval To Operate in India: Effect On Indian Crypto Market

As Binance and Kucoin get approval as virtual asset service providers, they are en route to start operations in India. Know how the industry perceives this development to affect the Indian crypto market.
Indian Crypto Market, 
Binance, Indian Crypto Market, KuCoin

After receiving the approval of the Financial Intelligence Unit ( FIU) of India, offshore crypto currency exchanges Binance and Kucoin have successfully registered for trading in India. As per reports from, offshore currency exchange companies have registered themselves as virtual asset service providers (VASPs). Both crypto exchanges along with seven other crypto service providers were banned on January 1, 2024, in India due to money laundering activities and non-compliance with India's crypto laws.

Virtual asset service providers (VASPs) are business entities like crypto exchanges, ATMs, wallet custodians, and hedge funds that facilitate exchanges between several virtual assets or between virtual assets and fiat currencies. They also perform functions such as transferring and managing virtual assets or offering financial services related to virtual asset issuances.  

Impact On the Indian Crypto Market

According to market estimates in January 2024, nearly USD 4 billion in crypto assets were in offshore platforms, with Binance reportedly holding 80 per cent of such holdings. Roshan Aslam, CEO & Co-founder, GoSats said, “The effect of Binance will be immense in the Indian crypto ecosystem. Binance is yet to complete the compliance steps with the Indian legislation - when they become VASP compliant and begin operations in India. Binance is the largest exchange in the world and it will be a market disruptor, especially in one of the highest crypto-adapting countries in the world. There have been controversies surrounding them, but they have implemented stronger KYC and AML policies and it’s just a matter of time before Indian investors become increasingly attracted to it."

Suman Banerjee, CIO, of alternate investment platform Hedonova,  "Indian investors will gain access to a wider variety of cryptocurrency assets and trading opportunities as a result of this move. It also reflects a growing recognition of the potential benefits of crypto adoption within the Indian market. However, investors need to exercise caution and diligence in navigating this evolving regulatory environment.

Balaji Srihari, Business Head, CoinSwitch, "It is commendable to see major global exchanges such as Binance and KuCoin leading by example and adhering to FIU standards. These norms establish a systematic approach to monitoring transactions and provide a designated channel for reporting suspicious activities. By strengthening compliance protocols, this framework ensures consumer safety. Therefore, it is imperative for all exchanges intending to operate in India to adhere to these regulations."


Crypto exchanges such as Binance, Kucoin, Huobi, Kraken,, MEXC Global, Bittrex, Bitstamp, and Bitfene were banned in India citing money laundering activities and non-compliance with India's crypto laws.

The show cause notice stated that to operate in India, cryptocurrency exchanges must register with regulators, follow FIU orders, and comply with the Prevention of Money Laundering Act (PMLA) 2002. Several exchanges in India deregistered their users and ceased local operations due to non-compliance with regulations. However, some exchanges, such as Binance and Kucoin, chose to apply for compliance. Vivek Aggarwal, the director of FIU-IND on May 10, 2024, stated that Kucoin's websites are no longer blocked after it has paid a fine of Rs 34.5 lakh for previous infractions. Meanwhile, the penalty amount for Binance is still being calculated, Business Standard quoted Aggarwal as saying.

Aggarwal said, “We are now having full visibility of transactions that we need, and the STR (suspicious transaction report) submission process will start soon.”

The exchanges are required to appoint a principal compliance officer and provide their local address and contact information, among other requirements but the officer doesn't need to be located in India.

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