The Indian Finance Ministry has alleged that cryptocurrency exchange Binance has evaded around $85 million in taxes, a large chunk of the roughly $96 million that Digi-Dollar companies allegedly owe.
Binance’s alleged misconduct was revealed in a response [PDF] to a parliamentary question asking Finance Minister Pankaj Chaudhary for details on whether cryptocurrency exchanges are and are not involved in evading Goods and Services Tax (GST).
Since the question was asked by a member of the government, it is not surprising that Minister Chaudhary had a ready answer. The Minister said that the Ministry was aware of the issue and had registered 47 virtual digital asset providers (up from 19 last year), 17 of which have been charged with evading GST (Indian sales tax) to a total of $824.14 billion ($96 million).
By far the largest share of unpaid taxes is held by Binance group company M/s Nest Services Limited, which owes Rs 722.43 crore (US$85 million).
Binance announced on August 15 that it has gained approval to operate in India. This comes after the company was fined $2.5 million for operating without approval and failing to comply with anti-money laundering regulations. India banned Binance from operating for seven months until the situation was resolved.
In its August announcement, Binance said: …By expanding in India, Binance aims to promote responsible growth and contribute to the global development of digital assets, while at the same time raising standards in the local market and ensuring stronger user protection.
Binance was banned in the Philippines for operating without a license and was also operating without a license in the United States, a decision that caused the company to lose $10 billion in fines and settlement costs after the Department of Justice took action against the exchange. The second-highest amount of GST evaded on India’s list is paid to a company controlled by Indian cryptocurrency firm WazirX. It made headlines in July when it suspended operations after $230 million worth of assets were stolen from it and an incident believed to be the work of North Korean agents. Police in New Delhi recently arrested a man believed to be linked to the alleged theft.
