India Probes 400 Binance Traders for Evasion

Indian authorities are now reportedly set to investigate 400 Binance traders on the grounds of crypto tax evasion. This development comes following Binance’s reentry into the Asian market, during which it registered itself as a “reporting entity”.

India Tax Dep’t Targets Evasion Among Wealthy Binance Traders

According to a recent report by local media, The Economic Times, the Income Tax Department under the Central Board of Direct Taxes (CBDT) in India has been ordered to probe 400 high-net-worth individuals for hiding their crypto trades on the Binance exchange. 

These traders are suspected of evading taxes on their crypto profits between 2022-23 and 2024-25, while also refusing to reveal their investments in various exchange wallets outside the country.  In India, there is a 1% tax on every crypto sale, followed by a total tax ranging from 33% to 38% on every profit, along with 4% fees that could push the effective tax rate to around 42.7%.  

Wealthy traders in India had long relied on foreign exchanges such as Binance to evade the country’s strict crypto tax regime, a strategy that has now backfired amid recent enforcement actions. According to The Economic Times, many of these transactions were facilitated through the transfer of USDT, a stablecoin, to Binance accounts, or via traditional banking channels under the Reserve Bank of India’s Liberalized Remittance Scheme.

Binance was banned in India in 2023 after the country’s Financial Intelligence Unit (FIU) reported that the exchange had failed to comply with anti-money laundering (AML) regulations. However, in August 2024, Binance resolved the issue by meeting all regulatory requirements, paying a $2 million fine, and registering as a reporting entity with the FIU. This arrangement enabled the exchange to share user information with Indian authorities, a move that has now paved the way for the ongoing tax probe.

In addition to evaluating trade profits, the ITD would also be evaluating the peer-to-peer trading activity on the Binance exchange. According to data from Statista, the crypto market in India remains vibrant with projections to reach a revenue size of $9.7 billion in 2025. 

While the Asian nation may be crypto-friendly in that digital assets are recognized investments, there is also much regulatory caution in view of protecting consumers’ interests. For example, the Bombay Stock Exchange recently rejected a company’s public listing due to crypto investment intentions using raised capital.

Crypto Market Overview

At the time of writing, the total crypto market cap is valued at $3.68 trillion, representing a slight 1.67% recovery in the last day. Meanwhile, total daily trading volume is up by 32.40% and valued at $400.72 billion. 

Featured image from Flickr, chart from Tradingview

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.