Binance – the world’s largest cryptocurrency exchange by trading volume – had a turbulent regulatory journey in India: banned in January 2024 for operating without compliance, blocked from app stores, fined Rs 18.82 crore, and then reinstated through FIU-IND registration in August 2024. As of March 2026, Binance is fully legal and operational in India as a Registered Reporting Entity under the Prevention of Money Laundering Act framework.
January 2024: The Ban and Its Reasons
In December 2023, India’s Financial Intelligence Unit (FIU-IND) issued show-cause notices to nine offshore cryptocurrency exchanges – Binance, KuCoin, Huobi, Kraken, OKX, Gate.io, Bittrex, Bitstamp, and MEXC Global – for operating in India without registering as Reporting Entities under the Prevention of Money Laundering Act (PMLA).
The Ministry of Finance clarified that Virtual Digital Asset service providers conducting exchange, transfer, or custody of digital assets for Indian users must register with FIU-IND regardless of whether they have physical presence in India. This was a landmark assertion of regulatory jurisdiction over offshore platforms serving Indian customers. In January 2024, MeitY blocked Binance’s website and app in India. Apple removed Binance from the Indian App Store. Google delisted the Binance app from the Indian Play Store.
August 2024: FIU Registration and Legal Reinstatement
After paying Rs 18.82 crore (approximately $2.2 million) in penalties for operating without FIU-IND registration, Binance completed its FIU-IND registration as a Reporting Entity in August 2024 – its 19th global regulatory milestone. Binance CEO Richard Teng stated: “Our registration with the FIU-IND marks an important milestone in Binance’s journey.” Binance’s website and app became fully accessible to Indian users following registration.
KuCoin similarly paid a $41,000 penalty and registered with FIU-IND. OKX chose to exit India rather than register. Coinbase also registered with FIU-IND. As of March 2026, Binance is in full regulatory compliance with India’s PMLA framework and continues to operate with ongoing FIU-IND obligations.
What FIU Registration Means for Indian Users
FIU-IND registration as a Reporting Entity means Binance must: conduct comprehensive KYC verification for all Indian users (Aadhaar-linked e-KYC, PAN validation, liveness detection); report suspicious transactions to FIU-IND; follow the Travel Rule (sharing sender/receiver information for larger crypto transfers); maintain detailed transaction records; and file periodic reports with FIU-IND.
For Indian users: mandatory KYC before trading; all transactions are fully visible to Indian tax and financial intelligence authorities; no privacy coins (Monero, Dash) on the India-facing version due to AML compliance; and built-in tax reporting tools generating ITR-compatible reports for the 30% VDA gains tax.
Tax Obligations When Using Binance
The 30% flat tax on VDA gains (plus 4% cess = 31.2% effective) applies to all crypto transactions on Binance regardless of it being a foreign exchange. The 1% TDS on transactions above Rs 10,000 also applies. Important: When using Binance as a foreign exchange, the 1% TDS may not be automatically deducted at source in the same way as Indian exchanges – Indian users may need to self-assess and pay TDS on Binance transactions. The IT Department’s access to FIU-IND data means all Binance transactions are visible to Indian tax authorities.
Maintaining meticulous records of all Binance trades – acquisition cost and sale price in INR-equivalent for each transaction – is essential for accurate ITR filing. Binance’s transaction history export tools assist with this. Losses on Binance cannot be offset against other income under India’s crypto tax rules.
Final Thought
Binance is completely legal in India as of 2026. Its FIU-IND registration (August 2024, after paying Rs 18.82 crore penalty) makes it a fully compliant Reporting Entity subject to Indian AML laws. Indian users can trade on Binance with regulatory confidence. The same strict crypto tax rules apply as on any exchange: 30% flat tax on gains, 1% TDS, no loss offset, and mandatory ITR disclosure. Use Binance’s built-in tax reporting tools, maintain meticulous transaction records, and ensure all crypto income is fully declared in your annual Income Tax Return. The Income Tax Department has full visibility of FIU-registered exchange activity.
Frequently Asked Questions (FAQs)
Q1. Is my money safe on Binance in India?
A: Binance is legally operational in India under FIU-IND registration. However, unlike bank deposits, there is no government insurance for crypto held on exchanges. The WazirX hack of 2024 (Rs 1,900 crore stolen) demonstrated that even major exchanges face security risks. For large holdings, use hardware wallets (cold storage). Enable all security features including 2FA, anti-phishing code, and withdrawal address whitelisting. FIU registration provides regulatory accountability but does not insure against hacks.
Q2. Can I buy Bitcoin on Binance from India?
A: Yes. After completing Binance’s mandatory KYC (Aadhaar e-KYC + PAN card), Indian users can buy Bitcoin and other VDAs on Binance. Fund your account using Binance P2P trading (INR peer-to-peer transactions) or by first purchasing crypto on an Indian exchange and transferring to Binance. Every purchase and sale triggers tax obligations: 30% on gains, 1% TDS on sales above Rs 10,000, and mandatory ITR declaration.
Q3. Which other crypto exchanges are currently legal in India?
A: As of March 2026, FIU-IND registered and legally compliant exchanges include: Binance (registered August 2024); KuCoin (registered after penalty); CoinDCX (REID VA00030982); WazirX; CoinSwitch Kuber; ZebPay; and Coinbase. Always verify current registration at fiuindia.gov.in before using any exchange. Unregistered exchanges remain blocked and using them violates PMLA, potentially attracting regulatory action and making it difficult to recover funds if problems arise.
Q4. Do I pay tax on Binance profits differently than Indian exchanges?
A: The tax rate is identical: 30% flat tax on gains + 4% cess = 31.2% effective rate, regardless of which exchange you use. The key practical difference: Indian exchanges automatically deduct 1% TDS at source on each sale transaction, giving you documentation. On Binance (foreign exchange), you may need to self-calculate and pay TDS through advance tax payments. Consult a CA experienced in crypto taxation for the most current guidance on TDS obligations for Binance transactions.
Q5. Can the government freeze my Binance account?
A: As an FIU-IND Reporting Entity, Binance is required to cooperate with legitimate law enforcement requests from Indian authorities. If you are under investigation for financial crimes, the Enforcement Directorate or income tax authorities can direct Binance to freeze or report your account activity. This is the same situation as with Indian exchanges – FIU registration means Indian authorities have legal access to your transaction data. Ensuring all crypto income is declared in your ITR is the best protection against such situations.
