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Financial Intelligence Unit authorizes Binance and Kucoin to become virtual asset service providers
Indian government Financial Intelligence Unit (CRF) approved requests for offshore services cryptocurrency exchanges Binance and Kucoin to save them as Virtual Asset Service Providers (VASP) trading Indiasaid a senior government official.
Kucoin paid a penalty of Rs 35.5 lakh for past non-compliances and the ban on its websites was lifted. Meanwhile, Binance’s liability amount is still being calculated, he said.
“SO Kucoin And Binance I registered with FIU India,” Vivek Aggarwal, director of FIU-IND, told reporters on Friday. “We now have full visibility into the transactions we need and the process of submitting STRs (suspicious transaction reports) will begin soon.”
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AND was the first to report in the April 18 edition that Binance, the world’s largest cryptocurrency exchange banned by the government in January, was set to return to India by paying a penalty of around 2 million of dollars.
Aggarwal, however, did not confirm the amount and said the calculations were still underway. He added that FIU Guidelines does not require offshore entities to register a separate company in India, but “there must be a Chief Compliance Officer who is registered with the FIU, India, and whose address and contact details are available of the FIU to interact. » Asked about the case of individual investors who traded illegally on offshore platforms and evaded taxes for almost two years before the ban, the official said such transactions need to be investigated. “If the platform operates illegally, the investors also operate illegally. It is necessary to check whether a legitimate transaction has taken place, where the money comes from, whether it passes through a banking channel and whether it is declared in the tax return of the taxpayer concerned,” he said.
He was speaking at a joint workshop organized by the FIU and the Bharat Web3 Association, an industry body representing cryptocurrency exchange companies such as CoinDCX, WazirX, Mudrex and other Web3 players.
In January, Binance was among nine offshore cryptocurrency platformsnamely Kucoin, Huobi, OKX, Porte.io, Bittrex, Bitstamp, MEXC Global and Bitfinex will not be allowed to operate in India through web addresses and mobile applications. The government’s action was a response to platforms’ failure to comply with FIU and anti-money laundering guidelines.
Among them, Bitstamp and OKX have ended their operations in India, while Gate.io and Kraken are still in conversations with the FIU, Aggarwal said. Others have not responded to us, he added.
The FIU, responsible for overseeing the trading of virtual digital assets (VDA), will now have 47 registered entities engaged in the trading or management of crypto assets in India.
On the debate over the legitimacy of crypto asset trading in India, Aggarwal said that legitimacy comes from licensing while FIU registration aims to safeguard the financial security of the country.
“This is a debate that has been going on since TDS was imposed on crypto transactions. The same debate took place during the implementation of the AML CFT framework. So this piece is still missing.
“I would say that if a company was protected from financial crime, then automatically, if not legitimacy, the system would at least have a little more credibility,” he said.
The FIU and industry players will set up a task force to define self-regulatory guidelines to ensure growth of VDA business in India and draw best practices from global regulators.