Binance, the world’s largest cryptocurrency exchange, faces a significant decline in Indian user activity following regulatory pressure from India’s Financial Intelligence Unit (FIU). The FIU enforced compliance with anti-money laundering laws for offshore crypto exchanges, resulting in increased scrutiny that prompted Indian investors to leave Binance.
In December, the FIU declared nine offshore crypto exchanges, including Binance, were operating illegally in India and violating the country’s anti-money laundering regulations. The regulatory body called on these exchanges to comply with the rules and resolve related issues.
Following its initial notice, the FIU imposed access bans to the websites of nine offshore crypto exchanges from India. Furthermore, as of January 12, access to the Binance app was removed from Apple’s App Store in India.
The halt of Binance’s operations in India was particularly impactful as it was confirmed to be the most popular exchange in the country. This was evidenced by a surge in concerns from Indian crypto investors directed to Binance’s customer support.
In response to the situation, Binance stated their commitment to complying with local laws, protecting users, and promoting a developing Web3 industry through strong communication with regulators. Following Binance’s exit, local Indian crypto exchanges like WazirX and CoinDCX experienced a significant increase in trading volume as they began to attract more users.