Binance no longer accepts cash for P2P transactions in India.

Binance’s service was promoted by India’s cryptocurrency trading community to avoid government taxes on cryptocurrency trading. The new development comes at a time when Indian financial institutions have approved Binance and KuCoin as virtual asset providers in the country. The Indian government has banned Binance and other foreign cryptocurrency platforms for violating anti-money laundering regulations. Binance offers escrow services to Indian cryptocurrency investors, allowing them to trade by paying in local currency.

A leading English-language newspaper in India reported that Binance has discontinued cash payment services for P2P transactions. Binance customers in the United Arab Emirates will continue to be able to use their local currency, UAE Dirham, for transactions. Binance did not respond to the report’s submission, while Indian authorities have questioned the use of the major cryptocurrency platform for tax evasion and money laundering activities. India’s Ministry of Information Technology has ordered tech stalwart Apple to remove these cryptocurrency platforms from its iOS store.

The Treasury Department has issued show-cause notices to overseas cryptocurrency exchanges, including Binance, Kraken, and Bitfinex, for illegal operations in the country. The Indian government’s Financial Intelligence Unit has not registered the aforementioned foreign cryptocurrency exchanges. Authorities have accused cryptocurrency companies such as Binance, Kraken and Bitfinex of violating anti-money laundering regulations. Cryptocurrency businesses in India operate under anti-money laundering laws.

Under anti-money laundering laws, cryptocurrency companies in India must report suspicious transactions and conduct customer due diligence. Foreign cryptocurrency exchanges in India must obtain a license from the Financial Intelligence Unit to provide virtual asset services.

Binance, which was banned in India in January, is considering a return to the country after paying a $2 million fine, even though KuCoin has paid a total of INR 35.5 Lakh in fines for past regulatory violations. The government’s strict measures against overseas cryptocurrency exchanges are beneficial to domestic exchanges. India has imposed a hefty tax on profits from digital asset transfers, apart from a 1% tax deducted at source. India’s domestic cryptocurrency exchanges are experiencing a period of growth as overseas exchanges struggle to comply with strict regulations.

CoinSwitch is India’s largest cryptocurrency exchange with a user base of 20 million, followed closely by WazirX. India is a prominent country in peer-to-peer cryptocurrency trading. Cryptocurrency traders in India have access to a variety of payment options, including online fund transfers, Unified Payments Interface (UPI), physical cash, and cash deposits into bank accounts. Additionally, 75% of Indian cryptocurrency traders are under 35 years of age.

This allows cryptocurrency companies to avoid restrictive tax regulations imposed by the Indian central government on cryptocurrency trading. Establishing legitimacy in the Indian cryptocurrency market is a difficult task for both domestic and foreign cryptocurrency exchanges. Cash deposits or invoices are no longer accepted for Binance users in India to buy or sell cryptocurrencies.