India's financial regulatory body, the Financial Intelligence Unit (FIU), has granted permission for Binance, a prominent global cryptocurrency exchange, to resume operations in the country. This move makes Binance the second overseas digital currency platform allowed back into the Indian market, following KuCoin's earlier approval.

Vivek Agarwal, head of the FIU, disclosed Binance's FIU registration, indicating its official recognition after being among several foreign platforms issued with an institutional noncompliance order late last year. In response to this order, India's Finance Ministry directed the IT section to block access to the implicated crypto platforms' URLs and mobile applications in India in mid-January 2024. Among the platforms affected were Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex.

Following this action, several platforms engaged with Indian regulatory authorities to achieve FIU compliance and resume services for Indian customers. While Binance and KuCoin successfully returned, other platforms like OKX and BitStamp exited the Indian market.

Earlier reports indicated Binance's anticipated return to India, contingent on its payment of a $2 million fine for previous noncompliance.

Binance's reentry coincides with a complex cryptocurrency landscape in India. The government imposed a 30% tax on cryptocurrency earnings and a 1% deduction for each crypto transaction, driving Indian investors to foreign exchanges to avoid high taxes. At its peak, Binance was believed to handle 90% of India's trading volume.

Despite India's active crypto scene and interest from major exchanges, stringent taxation and regulatory uncertainty have dampened the country's appeal for crypto traders and businesses, prompting many to operate overseas. Exchanges still active in India face challenges in winning investor trust due to regulatory ambiguity and limited banking support.