coingeek.com
After purging offshore digital asset exchanges from the country for noncompliance in 2023, India is reviewing its stance and is set to license two more companies in 2025.
According to a Business Standard report, the Financial Intelligence Unit-India (FIU-India) has received applications from four offshore exchanges and intends to clear at least two for operations early next year.
“We have received requests from four more offshore crypto exchanges to operate in India, and we assume that at least two of them will be permitted to resume operations by end FY25. This would be after undergoing a thorough review of transaction visibility, suspicious transaction reporting (STR), and other related issues,” a source within the FIU told the paper.
The FIU, India’s anti-money laundering agency, started the crackdown in December 2022 by sending “compliance show cause” letters to nine offshore exchanges. The group, which included Binance, MEXC Global, Bittrex, Bitfinex and KuCoin, was accused of operating illegally.
The crackdown intensified in January 2023, with the government demanding that Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOGL) delist these exchanges’ apps from their app stores.
Controversial as it was in some quarters, the move was welcomed by some local exchanges who believed that offshore platforms had been skirting the stringent compliance requirements to get a competitive edge over their local compliant rivals.
However, the FIU’s stance has softened since. It has readmitted Binance and KuCoin after they registered with it as reporting entities. The former registered with the FIU last month after paying a $2 million fine for noncompliance, while the latter paid a paltry $41,000 for re-entry. Binance, however, is facing other charges despite the FIU registration, with one agency demanding an $86 million fine.
The FIU source didn’t reveal which exchanges the agency intends to permit next year. However, some local industry leaders believe it’s a great stride for digital asset owners who now have more choices.
“Growing competition will undoubtedly put pressure on domestic exchanges to improve their products, potentially leading to regulatory issues as authorities strive to maintain compliance and protect investors in a quickly changing industry,” stated Raj Kapoor, the founder of the India Blockchain Alliance.
Despite all the hurdles, India still ranked first globally for digital asset adoption last year, according to a study by Chainalysis. However, most traders regard digital assets as an investment, with Indian Bitcoin pioneer Rohan Sharan telling CoinGeek that the country is pursuing other blockchain applications like tokenization more keenly.