India’s Financial Intelligence Unit (FIU) is expected to approve two additional offshore cryptocurrency exchanges to resume operations in the country. These approvals come after Binance and KuCoin were cleared to operate again, following a review of their compliance with Anti-Money Laundering (AML) regulations.
The FIU, responsible for overseeing AML compliance in India, is scrutinizing requests from four offshore crypto exchanges, with two likely to receive approval by the end of FY25. Previously, the FIU had blocked access to nine foreign exchanges, including Binance, for non-compliance with India’s AML standards.
The FIU aims to approve two offshore exchanges by the end of fiscal year 2025, following a thorough review of their AML compliance, transaction visibility, and reporting of suspicious activities. Binance and KuCoin have already been approved, with Binance registering as a reporting entity with India’s FIU in August 2024.
These approvals apply to foreign crypto exchanges seeking to operate in India. The Indian government has been cautious in regulating the cryptocurrency market, focusing on compliance with AML and anti-terrorism financing laws rather than the broader sale and purchase of digital currencies.
The move to approve additional offshore exchanges is expected to increase competition in India’s crypto market, offering better trading options and fostering innovation. This is part of India’s ongoing efforts to ensure that the crypto sector remains compliant with AML laws while providing a safe environment for investors.
The FIU will approve these exchanges after a detailed review of their transaction transparency and compliance with Indian regulations. With the return of Binance and KuCoin to the market, experts expect the addition of two more exchanges to increase market liquidity, lower fees, and improve trading options for Indian investors. However, this could also put pressure on domestic exchanges to enhance their offerings, potentially leading to regulatory challenges.
India’s Department of Economic Affairs (DEA) is also preparing a consultation paper on cryptocurrency legislation, expected to be released by October 2024, which will seek feedback from various stakeholders and further shape the future of digital currencies in the country.
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