This move is reminiscent of a similar decision made by Apple's App Store in India in December 2023. In December 2023, the Indian Ministry of Finance's Financial Intelligence Unit (FIU) issued a notice to several cryptocurrency exchanges, including Binance, Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex, and Bitfinex, citing illegal operations in India. The FIU stipulated that any exchange offering services to Indian users must register as a 'reporting entity' and submit statements to the income tax department. The FIU recommended the Ministry of Electronics and Information Technology to block the websites of the mentioned exchanges due to non-compliance.
Despite the removal from Google's Play Store, the Binance application and website remain accessible and functional for existing users according to Cointelegraph.com. Binance South Asia addressed the app blockage in India on X, assuring users that their accounts and funds are secure.
Cointelegraph further reports that following India's imposition of a 30% tax on cryptocurrency and a 1% tax deduction at source for every crypto trade, the volume on domestic crypto exchanges experienced a decline. Indian users adopted foreign crypto exchanges to evade the substantial tax regime.
The Indian Finance Bill 2022, approved by parliament in March 2022, brought on several modifications in tax regulations, introducing a 30% tax on cryptocurrency holdings and transfers. Additionally, traders are unable to offset losses against profits, and each trading pair is treated separately for tax calculations.
In November 2023, Binance agreed to pay USD 4 billion to settle an investigation from the US Department of Justice. The investigation focused on violations related to the Bank Secrecy Act, failure to register as a money transmitting business, and the International Emergency Economic Powers Act. At the same time, Binance's founder and CEO pleaded guilty to failing to maintain an effective anti-money laundering programme and has resigned from his position. The guilty plea was part of coordinated resolutions with the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN), Office of Foreign Assets Control (OFAC), and the US Commodity Futures Trading Commission (CFTC).
Attorney General Merrick B. Garland emphasised that Binance's status as the world's largest cryptocurrency exchange does not exempt it from legal consequences, citing the company's significant corporate penalty.
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