Binance Holdings Ltd, which was booming in the Indian markets and expanding its global reach amid cryptocurrency traders, is now flailing as local players like Mudrex and WazirX are once again dominating the crypto space in the country.

Binance got a show cause notice by FIU after non compliance with Indian laws.

Binance, which is one of the world’s largest cryptocurrency exchanges, is now seeing its downfall in India after the government decided to block its URLs in the country due to non-compliance with government norms.

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The crypto exchange platform also announced its split with Indian trading platform WazirX in 2022, when the latter was flailing on the crypto market. However, Binance’s downfall in India is now leading to the boom of local crypto trading players like WazirX and Mudrex.

Deposit inflows at WazirX jumped about 250% in the four days following India’s December 28 compliance show-cause notice to nine offshore platforms, including Binance, compared with the four days leading up to it, according to the company.

Meanwhile, Mudrex CEO Edul Patel told Bloomberg that over 30,000 customers have registered on the cryptocurrency trading platform since December 28, after Indian government’s crackdown against Binance.

WazirX said volumes haven’t budged much, while CoinDCX said the slight uptick it’s noticed in the past two weeks may be more due to overall bullish crypto sentiment. CoinSwitch, however, said trading volumes on its platform jumped 30-35% in the week following the FIU notice to offshore rivals. Like CoinDCX, CoinSwitch reopened for deposits after the FIU action.

Mudrex has also announced support for over 200 cryptocurrency tokens to aid free and seamless transfer of trading from Binance to its platform after Financial Intelligence Unit’s show cause notice to the global trading firm.

Why is Indian government cracking down against Binance

Binance has been dominating the cryptocurrency trading space in India since the last couple of years, prompting locals players to put pressure on the Indian government as fresh taxes unveiled in 2022 created an unfair playing field.

India’s Financial Intelligence Unit (FIU) later issued a notice to nine trading platforms, including Binance, for illegally operating in India, without proper compliance with the anti-money laundering laws in the country.

The FIU also asked the information ministry to block the nine platforms’ websites locally. On Friday evening, their URLs were not working in India. Their apps are still available on Google Play in India.

(With inputs from Bloomberg)

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