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The Indian government is cracking down on tax evasion in the cryptocurrency sector, revealing that major exchanges owe a hefty $97 million in unpaid GST.
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Among the firms involved, Binance stands out, facing a staggering $85 million in unpaid taxes, while others like WazirX have begun to settle their dues.
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According to a statement from the Ministry of Finance, the relentless scrutiny on exchanges reflects a broader regulatory initiative aimed at curbing financial misconduct.
Authorities accuse leading crypto exchanges in India of evading $97 million in taxes, with Binance facing the largest unpaid bill. Read on for insights.
Crypto Exchanges Face Major Tax Evasion Charges in India
The Indian government has uncovered significant unpaid Goods and Services Tax (GST) liabilities from cryptocurrency exchanges, including Binance and WazirX. Authorities estimate that these firms owe a combined $97 million in unpaid taxes. According to a statement by India’s Minister of State for Finance, the government has already recovered $14 million in taxes, penalties, and interest from some of the entities involved. The disclosure came in response to a parliamentary inquiry on December 2.
The investigation identified and charged 17 crypto companies for tax evasion. WazirX owes 40.5 crore rupees ($4.8 million), CoinDCX 16.84 crore rupees ($1.9 million), and CoinSwitch Kuber 14.13 crore rupees ($1.7 million). While most firms on the list have settled their dues, companies like Binance and Hyperux Technologies remain non-compliant. Binance reportedly owes 722 crore rupees ($85 million) in unpaid taxes, which has not been recovered as it was excluded from the total recovered sum announced by the government.
The 17 Crypto Exchanges Accused of Tax Evasion in India. Source: Ministry of Finance
Binance’s Regulatory Challenges Continue
The tax issue adds to a series of challenges Binance is currently facing. Recently, Amrita Srivastava, a former senior employee at Binance’s Link platform, filed a whistleblower lawsuit in the UK. Srivastava claims she was wrongfully terminated after reporting alleged misconduct, including a colleague’s bribe solicitation. In addition, Binance faced backlash in November for listing two Solana-based meme coins, The AI Prophecy (ACT) and Peanut the Squirrel (PNUT).
Critics accused the exchange of enabling pump-and-dump schemes; these low-cap tokens reportedly benefited select traders at the expense of retail investors. On the other hand, WazirX has continued to face critical challenges since its $235 million hack in July. The incident saw customer withdrawals suspended, and it has yet to be fully resumed.
“We will continue to pursue legal actions to reclaim illiquid and stolen assets actively, ensuring they are secured for Creditors’ benefit. This process includes tracking these assets and preventing unauthorized withdrawals to maximize potential returns for Creditors,” WazirX recently wrote on X (formerly Twitter).
Recently, Indian police arrested a key suspect linked to the hack. However, the primary perpetrator remains unidentified. The Indian government’s intensified scrutiny highlights a broader regulatory crackdown on the cryptocurrency sector, with tax evasion and security concerns remaining central issues.
Conclusion
The ongoing investigation into tax evasion by major cryptocurrency exchanges in India underscores the government’s commitment to enforcing compliance within the industry. With Binance facing significant challenges, including legal actions and regulatory scrutiny, the future landscape for crypto trading in India may shift significantly. Stakeholders must navigate this rapidly evolving environment, ensuring they adhere to the law while safeguarding their interests.
