India investigating 400 Binance traders for alleged crypto tax evasion: report

Indian tax authorities have launched an investigation into more than 400 wealthy traders using Binance, suspecting large-scale crypto tax evasion, according to a report from the Economic Times.

The survey, conducted by the Central Board of Direct Taxes (CBDT), targets activity between 2022-23 and 2024-25 and directs regional offices to submit their findings by October 17.

Indian crypto tax burden hits 42.7% for highest earners, survey targets evasion

The traders examined reportedly avoided paying India’s hefty cryptocurrency taxes, which include a 1% withholding tax on each transaction and a 30% tax on profits.

When combined with surcharges and a 4% tax, the effective rate can reach 42.7% for top earners.

The government has maintained its strong stance on digital assets, with Union Minister Piyush Goyal recently reaffirming India’s commitment to expanding its central bank digital currency (CBDC) while continuing to heavily tax private cryptocurrencies.

Binance was banned from operating in India at the end of 2023, along with eight other offshore exchanges, after the Financial Intelligence Unit (FIU) accused them of violating the Prevention of Money Laundering Act.

The company subsequently paid a $2.25 million fine and re-entered the Indian market in August 2024 after registering as a “reporting entity”, a move that would have allowed authorities to access data for the ongoing tax investigation.

Investigators are also looking into peer-to-peer (P2P) transactions made through Binance and settled using local bank accounts, Google Pay or cash, the report said.

Although cash settlements have since been discontinued, authorities believe these methods may have been used to hide taxable income.

The investigation adds to the growing regulatory challenges facing Binance, which is also dealing with the fallout from token dropouts and system failures in other markets.

The exchange recently pledged to compensate affected traders, as the crypto industry as a whole continues to face record liquidations and increased government scrutiny around the world.

14 People Sentenced to Life in India for Kidnapping Crypto Investor

In August, an Indian anti-corruption court sentenced 14 men, including 11 former police officers and ex-lawmaker Nalin Kotadiya, to life in prison for the kidnapping and extortion of businessman Shailesh Bhatt in 2018 over his cryptocurrency holdings.

The group was found guilty of kidnapping, conspiracy and corruption-related offenses by a special court in Ahmedabad.

The case dates back to February 2018, when Bhatt was kidnapped at gunpoint by men posing as CBI officers and taken to a farm near Gandhinagar.

He was forced to transfer 34 Bitcoins worth around $150,000 at the time. The kidnappers also demanded 176 BTC and another ₹32 crore ($3.6 million), although the second ransom attempt failed when the courier became suspicious.

In the same month, India’s Enforcement Directorate (ED) raided 11 locations in cities including Delhi as part of a global crypto fraud scheme. The crackdown followed FIRs filed by the CBI and Delhi Police.

According to officials, the accused posed as law enforcement or tech support agents to extort money from Indian and foreign nationals.

The article India Investigates 400 Binance Traders for Alleged Crypto Tax Evasion: Report appeared first on Cryptonews.

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