Binance in Talks with Indian Government, But PMLA Compliance Remains a Stumbling Block
Cryptocurrency exchange Binance is negotiating with the Indian government to restore access to its platform in the country, but a sticking point remains: compliance with the Prevention of Money Laundering Act (PMLA).
While Binance is willing to pay any outstanding taxes and penalties, the company reportedly needs more time to implement processes that adhere to PMLA and Financial Intelligence Unit (FIU) regulations. The government, however, has refused to grant them temporary access, insisting on full compliance first.
This impasse comes after the Indian government banned nine offshore crypto platforms, including Binance, for failing to respond to inquiries from the FIU. The FIU plays a crucial role in combating money laundering and requires crypto exchanges to report large transactions, conduct KYC checks, and monitor suspicious activity.
The government’s concern isn’t unfounded. Sources estimate that around $4 billion worth of Indian cryptocurrency is parked in offshore wallets, primarily on Binance. Additionally, nearly 4,000 Indian traders, believed to be top investors, are reportedly using VPNs to bypass the ban and continue trading on Binance, raising concerns about potential illegal activity.
To address this, the government is collaborating with banks and financial institutions to take action against traders using VPNs. They aim to prevent a repeat of the situation where foreign exchanges operate without proper licensing and oversight.
Binance, on the other hand, maintains its commitment to local regulations and user protection. They’ve vowed to continue discussions with regulators and keep users informed through official channels.
Whether Binance can convince the government to grant them temporary access while they work on compliance remains to be seen. The outcome of these negotiations will have significant implications for the future of cryptocurrency regulation and accessibility in India.
