Binance Fined $2M by India’s FIU Amid Regulatory Crackdown

Binance, a cryptocurrency exchange, has been fined 188.2 million rupees ($2.25 million) by India’s Financial Intelligence Unit (FIU-IND) for failing to adhere to the nation’s Anti-Money Laundering (AML) regulations. The sanction, which was announced on June 19, underscores the numerous violations of the Prevention of Money Laundering Act (PMLA), 2002, that Binance committed while providing services to Indian clients.

Binance is subject to a fine in India.

Binance is classified as a reporting entity under Section 2(sa)(vi) of the PMLA, as it operates as a Virtual Digital Asset Service Provider. This designation requires the exchange to implement rigorous anti-money laundering (AML) measures and maintain comprehensive transaction records. Binance failed to satisfy these critical obligations while offering its services in India, according to an investigation conducted by FIU-IND.

Indian authorities issued show-cause notices to Binance and several other offshore cryptocurrency exchanges in January 2024, alleging them of operating illegally within the country. This action resulted in the eviction of these entities from the Indian market.

Conditional approval was granted to KuCoin by the Financial Intelligence Unit (FIU).

In May, Binance and KuCoin, another cryptocurrency exchange, became the first offshore entities to receive conditional sanction from FIU-IND. This authorization was contingent upon the payment of a penalty subsequent to a formal hearing. Nevertheless, the allegations against Binance were substantiated by FIU-IND’s subsequent announcement, which was founded on both written and oral submissions from Binance’s Director.

Violations and Penalties of Binance

FIU-IND imposed a fine on Binance for a variety of severe violations, such as the failure to maintain and report transaction records as required.

– Neglecting to provide the authorities with the requisite information.

– Failure to maintain transaction records in accordance with legal requirements.

These violations highlight substantial deficiencies in Binance’s adherence to India’s rigorous anti-money laundering (AML) legislation, which is intended to prevent money laundering and other illicit financial activities.

International Regulatory Review

Binance’s most recent penalty is not an isolated incident. In other countries, the exchange has been subjected to regulatory scrutiny and fines for violations of a similar nature. The exchange was fined $4.4 million by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) in May for neglecting to register as a foreign money services business and report large digital currency transactions exceeding $10,000.

Binance has filed an appeal against this sanction, disputing allegations of noncompliance with AML and Countering the Financing of Terrorism (CFT) regulations.

Furthermore, two executives of Binance were apprehended by Nigerian authorities in February on suspicions of tax evasion and money laundering. These incidents underscore the exchange’s ongoing global regulatory challenges as it navigates intricate legal terrain across various jurisdictions.