India imposes 225 million fine on Binance for AML breaches
Binance, the world’s leading blockchain and cryptocurrency platform, has been hit with a substantial penalty of Rs 18.82 crore ($2.25 million) by India’s Financial Intelligence Unit (FIU) for its failure to comply with anti-money laundering (AML) regulations. This fine is crucial for Binance to resume its operations in India.
The problems for Binance began with a notice in December 2023, which eventually led to its registration with the FIU in May of this year. Along with Binance, eight other offshore exchanges, including KuCoin and Huobi, faced similar scrutiny for their non-compliance with local regulations.
According to the Director of FIU-India, Binance was found to be operating in India without meeting the stringent requirements of the Prevention of Money Laundering Act (PMLA). Despite submitting documents during a thorough review, Binance fell short of meeting important AML guidelines.
To rectify these issues and prevent future violations, Binance has been provided with specific instructions to ensure strict adherence to Chapter IV of the PMLA of 2002 and the PMLA Maintenance of Record Rules of 2005. These rules are crucial in preventing money laundering and terrorist financing activities.
The fine imposed on Binance is part of a broader effort to bring international exchanges in line with local regulations. Earlier this year, the Indian government took action by blocking the websites of these exchanges and removing their apps from platforms like Google and Apple.
Binance and KuCoin’s recent registration with the FIU is a significant milestone, demonstrating their commitment to meeting India’s stringent AML compliance requirements.
Binance is facing regulatory challenges worldwide, not just in India. Former CEO Changpeng Zhao was sentenced to four months in prison in the United States for violating anti-money laundering laws. Additionally, Binance is currently appealing a $4.4 million fine in Canada for failing to register as a foreign money services business and report large virtual currency transactions.
This appeal comes after a significant $4.3 billion settlement in the United States for similar violations, which resulted in Binance exiting the Canadian market last year.