Indian authorities have ordered the world's largest crypto exchange, Binance, to pay approximately $86 million in overdue taxes.
A source familiar with the matter said that Binance earned at least $476 million from transaction fees charged to Indian customers. These earnings were credited to Nest Services Limited, a Binance Group Company based in Seychelles.
As reported by The Times of India on August 6, the crypto exchange has now appointed a local counsel to address these tax compliance issues.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
Non-custodial Wallet: Why Do You Need It Right NOW
Under Indian law, all crypto service providers and investors must pay a 1% tax deducted at source (TDS) on every transaction, regardless of its size. Additionally, profits from crypto investments are subject to a 30% tax.
While local exchanges have established systems to manage these tax obligations for their users, many foreign exchanges did not initially adhere to these requirements. In January this year, India banned Binance and several other foreign crypto exchanges for failing to comply with local regulations.
However, four months later, Binance was set to return to the country by paying a penalty of $2 million for non-compliance. One Indian official then commented:
<It is> unfortunate that it took <Binance> more than two years to realise there is no room for negotiations, and <that> no global powerhouse can command special treatment, especially at the cost of exposing the country’s financial system to vulnerabilities.
The additional $86 million fine imposed on the crypto exchange aims to recover transaction fees earned from Indian customers during its previous operations.
This tax demand marks the first instance of the Indian government targeting a crypto exchange for unpaid taxes. However, Indian authorities will likely extend similar tax demands to other international crypto exchanges, such as Kraken, Bitfinex, HTX, Gate.io, KuCoin, and MEXC.
This pursuit of unpaid taxes underscores India's commitment to enforcing regulations in the cryptocurrency sector.
In other news, a Nigerian court has recently issued an arrest warrant for a prison doctor at Kuje Correctional Centre due to his failure to provide a medical report for Binance executive Tigran Gambaryan. Detained in Nigeria since February, Gambaryan has recently reported serious health issues, including severe back pain.
