Key Insights
- Binance suspends cash payments for P2P trading in India to enhance regulatory compliance and security.
- The move follows Binance’s registration with India’s Financial Intelligence Unit and a potential $2 million penalty for non-compliance.
- Binance assures users of alternative payment methods and remains committed to the Indian market despite regulatory challenges.
MUMBAI (MarketsXplora) – Cryptocurrency exchange Binance has suspended cash payments for peer-to-peer (P2P) trading in India to enhance regulatory compliance and security.
The move aims to mitigate money laundering risks and foster a safer trading environment, even as cash transactions have been a convenient option for users in regions with limited banking access.
Binance assured users that alternative payment methods, such as bank transfers and digital wallets, remain available. However, industry experts have mixed reactions, with concerns about potential impacts on trading volumes and liquidity, particularly in cash-reliant areas.
The exchange stated that the alternative methods align with regulatory requirements, reducing the risk of illicit activities and underscoring Binance’s commitment to compliance. This decision reflects the growing trend of increased regulatory scrutiny within the cryptocurrency industry.
Recently, India’s Financial Intelligence Unit (FIU) registered Binance and KuCoin, allowing the exchanges to re-enter the country following months of regulatory scrutiny and legal battles. KuCoin paid a $41,000 penalty to resume operations, while Binance awaits a decision on its penalty.
Read also! India’s Financial Watchdog Fines Binance $2.25 Million for AML Liolations
The FIU clarified that despite registration, Binance must continue with compliance proceedings until the penalty is finalized. Other platforms, including Kraken, Gemini, and Gate.io, are negotiating with regulators to ensure compliance with Indian regulations, while OKX and Bitstamp have proposed exiting the country altogether.
In April, Binance announced plans to return to the Indian market following its forced exit in January due to regulatory non-compliance. The exchange faces a $2 million penalty but recognizes India as a lucrative market.
Indian authorities cracked down on nine crypto exchanges, including Binance, in January, citing violations of anti-money laundering laws. The move resulted in the removal of these exchanges’ mobile apps from major app stores and the blocking of their websites in the country. Despite the setback, Binance acknowledged India’s significant market potential and expressed willingness to pay the substantial fine to regain access.