According to reporting by The Economic Times, officials from the Central Board of Direct Taxes (CBDT) have begun coordinating a nationwide operation targeting more than 400 high-value accounts linked to Binance’s trading platform. Each regional office has been ordered to deliver its findings by October 17, signaling that the country’s enforcement push is entering a new, data‑driven phase.
Why the Stakes Are So High
India’s crypto investors operate under a uniquely heavy fiscal burden. The government imposes a 1% tax deducted at source (TDS) on every transaction and a 30% capital gains tax, which can rise to over 42% once surcharges and levies are factored in. For top‑tier traders, that means nearly half of their profits can vanish before they hit their wallets.
Authorities believe that a number of Binance users have been quietly bypassing these rules – particularly through peer‑to‑peer (P2P) systems that move funds directly between domestic bank accounts and digital wallets, sometimes even involving Google Pay or cash settlements.
From Ban to Cooperation
The investigation comes less than a year after Binance’s return to the Indian market. The exchange was blocked in late 2023, alongside several rivals, after regulators accused them of operating outside the framework of the Prevention of Money Laundering Act (PMLA).
In August 2024, Binance struck a deal to re‑enter India, paying a $2.25 million penalty and registering as a reporting entity with the Financial Intelligence Unit (FIU). That move, designed to rebuild trust with policymakers, now appears to be enabling closer cooperation between Binance and Indian tax officials – including the sharing of transactional data for ongoing investigations.
Crypto Policy at a Crossroads
While enforcement tightens, Indian officials are also laying the groundwork for a state‑controlled digital rupee. Union Minister Piyush Goyal recently said the government intends to expand testing of its central bank digital currency (CBDC) while keeping non‑sovereign cryptos under strict taxation. “We are not banning innovation,” he said, “but we are taxing speculation.”
Analysts say the contrast is deliberate: India wants to maintain technological leadership in digital finance while discouraging the use of foreign or decentralized coins that challenge its monetary authority.
Binance Under Pressure Once Again
For Binance, the renewed scrutiny adds to an already heavy global compliance load. The exchange has faced regulatory friction across multiple jurisdictions in 2025 and recently pledged compensation for users affected by market disruptions tied to asset depegs and liquidations.
The Indian case underscores how fast the crypto world’s early promises of anonymity are fading. Once seen as beyond government reach, top traders now find themselves squarely in the taxman’s sights – especially in countries where digital money is no longer a gray zone but a governed financial frontier.
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