India issues high tax notice to Binance! First international exchange fined

The Indian tax authority DGGI has issued a tax notice of nearly $86 million to Binance for collecting fees from Indian trading users between July 2017 and March 2024. Binance has raised objections to this.

Strike the Thief First, DGGI Takes the First Shot at Binance

DGGI's responsibility is to collect, organize, and disseminate information related to tax evasion and exercise its functions within the jurisdiction of the Ministry of Finance. Previously, DGGI has taken action against Indian exchanges, but Binance is the first international exchange to be targeted.

In June 2024, Binance was fined around $2.2 million for providing services to Indian customers without complying with India's anti-money laundering rules. Later, the exchange also obtained approval from the Financial Intelligence Unit (FIU) and became a registered entity.

However, a tax notice does not necessarily lead to a fine. Earlier this month, following a challenge from Infosys in Bangalore, India, DGGI revoked some of the charges against the global technology company.

DGGI, Specializing in Crypto Taxation

Government officials are generally perceived as lacking technical knowledge and understanding of cryptocurrencies, but DGGI is not a group of ordinary tax officials.

DGGI is India's premier technical institution, with a team that has been closely monitoring the cryptocurrency space and, due to their technical background, is capable of understanding the evolving field. Considering the relatively complex nature of cryptocurrencies and their transactions, and the novelty of this area for tax authorities (India has not yet completed legislation to regulate cryptocurrencies), various agencies have given exchanges more room to operate.

CZ Pursues Further Education Abroad, Binance to Collaborate with Tax Authorities

In November last year, Binance founder CZ Zhao Changpeng reached an agreement with the U.S. government. He pleaded guilty and agreed to pay $4.3 billion, ultimately receiving a four-month prison sentence. He began serving his sentence in early June this year and is expected to be released in October. Unable to respond personally while incarcerated, Binance emphasized, "Regarding the notice from the Directorate General of Goods and Services Tax Intelligence (DGGI) in India, what we would like to clarify is that Binance has always been committed to complying with relevant regulations applicable to Binance. We are fully cooperating with the Indian authorities to resolve any issues, and Binance is always committed to maintaining the highest standards of compliance and transparency in the industry. We are currently reviewing the details and cooperating fully with the Indian tax authorities."

On the other hand, DGGI declined to comment on the reports.

Binance founder Zhao Changpeng CZ has reported to federal prison to begin his four-month sentence.