By Lal Singh There has been a lot of argument, discussion and changes in the law whether the cryptocurrency exchange Binance is legal in India or not. Here is detailed information of the situation whether it is safe to use Binance in India.
History of Binance:
India never recognize cryptocurrencies as legal tender this means that the Indian government does not treat them as a currency. The Indian government has built up it’s tax systems for profits from virtual digital assets and had service providers, like exchanges which are register under anti-money-laundering regulations since past few years.
Binance’s Journey in India:
- In late 2023 FIU-IND issued show-cause notices to Binance and some other offshore crypto exchanges for operating without the proper registration and breaking anti-money-laundering (AML) Law.
- On January 12, 2024, India had stopped some foreign exchanges including Binance because they never follow the rules.
- On June 19, 2024, the FIU-IND penalised Binance ₹18.82 crore which is about US$2.25 million for not following the rules set by the PMLA Act
- In August 2024, Binance officially registered with FIU-IND as a reporting entity. Which means Binance could start doing business in India again, but only under some specific rules.
Current Legal Situation:
- Currently Indian users can use Binance. You can sign up, complete the KYC requirements and then use the site to trade different types of virtual digital currency or assets.
- Binance does not have a license from the RBI or the Securities and SEBI to run as a full-fledged local exchange. It is registered with the FIU as a “reporting entity” only. Users must follow the taxation rules first. India, for example, taxes profits from “virtual digital assets,” and people who use exchanges are obligated to report their income and pay the right amount of tax.
What does this means to Indian?
- If you are living in India and using Binance then you are not breaching any kind of law just by trading on the site, as long as you follow KYC, tax and other rules. But being registered with FIU-IND does not ensure that RBI/SEBI fully controls you which means there is some types of regulatory risk. Someone says “It is not officially licensed or regulated, which makes it illegal.”
- Be Careful: P2P trading and third-party INR deposits and withdrawals may come with additional regulatory and compliance risks just like being looked at for money laundering.
Few things to consider Before Using Binance:
- Make sure you complete the full KYC process with Binance to get full access.
- For tax reporting and compliance keep complete documents of all the transactions.
- Always try to Keep an eye out for changes in the law: India’s rules for cryptocurrencies are still changing.
- Never use the deposit or withdrawal procedure that aren’t approved or look suspicious. This could get the attention of authorities or make tax filing harder.
Conclusion:
In short, yes you can use Binance in India as long as you follow all the rules & regulations of Indian govt. and are aware that it is not regulated in the same way as a bank or stock market in India. Though it is legally registered with the FIU-IND, but it doesn’t have a complete trading license from the RBI or SEBI which menas there is still some type of risk and uncertainty with Binance. If you have decided to trade on Binance then you can do it safely and try to maintain your all transaction records straight and stay up to date on India’s changing crypto laws.