FIU Approves Binance and Kucoin as VASPs in India

India’s Financial Intelligence Unit (FIU) has granted approval to cryptocurrency exchanges Binance and Kucoin to operate as Virtual Asset Service Providers (VASPs) in the country, reports the Economic Times.

Vivek Aggarwal, Director of FIU-IND, confirmed the approvals during a press briefing, emphasising that this registration would enhance transparency in the platforms’ operations, facilitating the commencement of the suspicious transaction report (STR) submission process soon.

Kucoin, previously banned due to non-compliance issues, has resolved its dues by paying a penalty of Rs 35.5 lakh, resulting in the lifting of sanctions against its operations.

Meanwhile, Binance, the world’s largest cryptocurrency exchange, temporarily prohibited in January, is in the process of resolving its liabilities, expected to be around US$2 million, though the exact figure is yet to be confirmed by FIU.

Offshore entities operating in India are not mandated to establish a separate business entity but must appoint a principal compliance officer in the country, serving as the primary contact with the FIU.

This development follows the January ban on nine offshore cryptocurrency platforms, including Binance and Kucoin, for non-compliance with FIU and anti-money laundering guidelines.

Of these, platforms like Bitstamp and OKX have ceased operations in India, while others like Gate.io and Kraken are engaged in discussions with the FIU.

Presently, the FIU oversees 47 registered entities involved in trading or handling crypto assets in India.

Aggarwal emphasised that the legitimacy of crypto asset trading in India depends on licensing, while FIU registration primarily aims to combat financial crimes.

In collaboration with industry stakeholders, the FIU plans to establish a working group to develop self-regulatory guidelines, drawing on global regulatory best practices, to foster the growth of the Virtual Digital Asset (VDA) business in India.