- India’s Financial Intelligence Unit will assess four offshore cryptocurrency exchanges.
- The exchanges would be approved before 2025 based on a stringent compliance review.
- The move to bring in offshore exchanges paves the way for the growth of the crypto economy.
Crypto users in India can heave a sigh of relief as new crypto exchanges will come to pass before 2025. India’s Financial Intelligence Unit (FIU-IND) will assess around four offshore cryptocurrency exchanges, of which two will get the nod, implying that they can initiate operations.
Stringent Compliance Test
Although the names of the offshore exchanges are not yet revealed, they would follow the example of Binance and KuCoin, which were previously banned for non-compliance with India’s strict anti-money laundering (AML) laws.
According to a source, the Financial Intelligence Unit-India (FIU-India) will approve the new offshore exchanges based on their compliance with transaction visibility, suspicious transaction reporting (STR), and other AML protocols.
Re-entry of Binance, KuCoin
Following the ban imposed in 2023, over nine offshore cryptocurrency exchanges banned their operations in India. Earlier in March 2024, KuCoin was the first exchange to revoke the ban on its website by paying a hefty fine of over 35 lakhs INR to comply with Indian regulations. Binance followed behind in August by spending over $2 million on the Financial Intelligence Unit to resume its operations.
India to Release Cryptocurrency Policy Paper by September, Says DEA SecretaryEnhancing Domestic Market Competition
The decision to reintroduce offshore exchanges into the Indian market comes during significant growth in the domestic cryptocurrency ecosystem. The re-entry is expected to enhance market competition and offer Indian investors more diverse options. The conservative yet innovative approach suggests new pathways and provides rigorous control to check non-compliance and fraud against investors.
Crypto Legislation Paper
The Indian government has evolved its approach to the crypto platform by balancing innovation and financial security. The Department of Economic Affairs (DEA) has proposed to release a consultation paper between September and October regarding crypto legislation in the country. The paper will provide deep insights from industry holders in shaping the country’s long-term regulatory framework for digital assets.
