What happened?
India’s tax authority, the CBDT, has opened a probe into more than 400 high‑net‑worth traders on Binance suspected of evading crypto taxes. The investigation covers activity from 2022‑23 through 2024‑25 and includes scrutiny of on‑platform and peer‑to‑peer trades settled via bank transfers, UPI or cash. Authorities leveraged Binance’s registration as a reporting entity after the exchange paid a fine and re‑entered India, and regional offices were asked to report findings by October 17.
Who does this affect?
The immediate targets are wealthy Indian crypto traders who used Binance and offshore wallets, especially those who relied on P2P settlements to obscure gains. Binance itself faces heightened regulatory pressure after its prior ban, fine and conditional re‑entry, which puts its Indian operations under closer scrutiny. The probe also affects banks, payment apps, local P2P users and any platforms that facilitate cross‑border crypto flows, as well as broader crypto service providers watching enforcement trends.
Why does this matter?
The action raises compliance costs and enforcement risk for crypto trading in India, likely prompting selling pressure, reduced liquidity and greater price volatility in local markets. It signals to traders and exchanges that regulators will aggressively pursue unpaid taxes, which could push activity onshore to regulated venues or offshore to avoid scrutiny, altering trading volumes and market structure. Globally, tougher enforcement in a large market like India increases short‑term uncertainty and could dampen adoption while forcing exchanges and investors to reassess regulatory and tax risk.