India Investigates 400 Binance Traders for Alleged Crypto Tax Evasion
According to a report by Economic Times, Indian tax authorities have launched an investigation into over 400 wealthy traders using Binance, suspecting large-scale crypto tax evasion. The traders under investigation allegedly avoided paying India’s high crypto taxes, which include a 1% withholding tax on each transaction and a 30% tax on profits.
The investigation, led by the Central Board of Direct Taxes (CBDT), targets activities between 2022-23 and 2024-25 and directs regional offices to submit their findings by October 17. Combined with surcharges and a 4% deductible, the effective rate for top earners can reach 42.7%. The government has maintained its tough stance on digital assets, with Union Minister Piyush Goyal recently reiterating India’s determination to expand its central bank digital currency (CBDC) while continuing to heavily tax private cryptocurrencies.
India’s Crypto Tax Burden Reaches 42.7% for Top Earners
Binance, which was previously banned and later reinstated after paying a fine, is now under increased regulatory pressure. The company, along with eight other offshore exchanges, was banned from operating in India in late 2023 after the Financial Intelligence Unit (FIU) accused them of violating the Prevention of Money Laundering Act. Binance later paid a $2.25 million fine and re-entered the Indian market in August 2024 after registering as a “reporting entity,” a move that reportedly allowed authorities to access data for the ongoing tax investigation.
According to the report, investigators are also looking into peer-to-peer (P2P) transactions conducted through Binance and settled through local bank accounts, Google Pay or cash. Although cash settlements have since been discontinued, authorities believe these methods may have been used to conceal taxable income. The investigation adds to growing regulatory challenges for Binance, which is also grappling with the fallout from token depegs and system outages in other markets.
Key Takeaways:
The key points of the investigation are:
- The Indian tax authority is investigating over 400 Binance traders for allegedly dodging the country’s high crypto taxes.
- The investigation focuses on activities from 2022 to 2025 and includes the examination of peer-to-peer transactions.
- Binance, which was previously banned and later reinstated after paying a fine, is now under increased regulatory pressure.
14 Sentenced to Life in India for Kidnapping Crypto Investor
In August, an Indian anti-corruption court sentenced 14 men, including 11 serving and former police officers and former lawmaker Nalin Kotadiya, to life in prison for the 2018 kidnapping and extortion of businessman Shailesh Bhatt over his cryptocurrency holdings. The group was convicted of kidnapping, conspiracy and corruption offenses by a special court in Ahmedabad.
The case dates back to February 2018 when Bhatt was abducted at gunpoint by men posing as CBI officers and taken to a farmhouse near Gandhinagar. At that time he had to transfer 34 Bitcoin worth around $150,000. The kidnappers also demanded another 176 BTC and ₹32 crore (US$3.6 million), although the second ransom attempt failed when the courier became suspicious.
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