SUMMARY
FIU director said that Kucoin has paid a fine of INR 35.5 Lakhs for not complying with laws in the past, adding that the ban on the crypto exchange’s website has been revoked
Without offering a precise number, a top government official said that authorities are still calculating the “quantum of liabilities” for Binance
In January, MeitY banned nine overseas crypto platforms, including Binance and Kucoin, for flouting provisions of the PMLA and not registering as reporting entities with the FIU
Currently banned by the Indian government, crypto exchange Binance has reportedly received approval from the Financial Intelligence Unit (FIU) of the finance ministry to operate as a virtual asset service provider (VASP).
As per an ET report, the unit also approved a similar application from Kucoin. WIth this, all decks have been cleared for both platforms to operate and offer crypto trading services in the country.
“So Kucoin and Binance have got registered with FIU India… We are now having a full visibility of transactions that we need and the STR (suspicious transaction report) submission process will start soon,” FIU-IND’s director Vivek Aggarwal said.
He also said that Kucoin has paid a fine of INR 35.5 Lakhs for not complying with laws in the past, adding that the ban on the crypto exchange’s website has been revoked. Meanwhile, authorities are said to be still calculating the “quantum of liabilities” for Binance.
It is pertinent to note that the unit oversees trade in virtual digital assets (VDA).
Reiterating FIU guidelines, Aggarwal said that offshore entities do not need to register a separate business in India but rather have a “principal compliance officer who gets registered with FIU, India, and whose address and details are available to FIU for interacting”.
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On a question about individual investors trading on offshore illegal crypto platforms and evading taxes, he said that such transactions need to be studied. Aggarwal, however, added that such investors would come under the ambit of illegality.
“If the platform is illegally operating, the investors are also illegally operating. It has to be seen if there is a legitimate transaction that has happened, from where the money has come, whether it is going through a banking channel, and whether it is declared in the tax return of the concerned taxpayer,” he reportedly added.
This comes weeks after reports surfaced that Binance was set to make its way back into the country by paying a penalty of around $2 Mn (INR 16.71 Cr) and registering as an entity with the FIU.
The story traces its origins back to December last year when the unit issued notices to nine overseas crypto platforms, including Binance and Kucoin, for flouting provisions of the Prevention of Money Laundering Act (PMLA). The notices were also dished out to these companies for not registering as reporting entities with the FIU.
Eventually, in January this year, the FIU wrote to the Ministry of Electronics and Information Technology (MeitY) seeking a complete ban on the websites and apps of the nine crypto exchanges.
After disappearing from the country, Binance reportedly held talks with the government to revoke the ban but the Centre stuck to its demand and asked it comply with rules. Previously, it was reported that Binance was willing to pay taxes and penalties but was not yet ready to comply with PMLA norms.
As per current rules, all onshore and offshore cryptocurrency platforms operating in the country have to register as “reporting entities’ and comply with PMLA, 2002. Under these mandates, crypto exchanges have to mandatorily seek know your customer (KYC) details from customers while maintaining account records and business correspondence with clients.
Owing to the Centre’s demands, multiple platforms including the likes of CoinDCX, WazirX, Coinswitch, and Zebpay, have registered with the FIU.
