Indias FIU Imposes 225 Million Fine on Binance for Violating AntiMoney Laundering Regulations
India’s Financial Intelligence Unit (FIU) has imposed a fine of Rs 18.82 crore ($2.25 million) on Binance, the world’s leading blockchain and cryptocurrency platform, for non-compliance with anti-money laundering regulations. This penalty is necessary for Binance to resume its operations in India.
The FIU registration was mandated for Binance after the exchange received a show-cause notice in December 2023. Apart from Binance, eight other offshore exchanges, including KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, were also issued notices for violating local regulations.
The fine was imposed because Binance was found to be operating in India without adhering to the regulations outlined in the Prevention of Money Laundering Act (PMLA). After a thorough examination of Binance’s submissions, it was concluded that the exchange had failed to comply with local anti-money laundering regulations. As a result, the fine of Rs 18.82 crore ($2.25 million) was imposed to allow Binance to resume its operations in the country.
To prevent further violations, Binance has been given specific instructions to ensure strict compliance with the obligations outlined in Chapter IV of the PMLA of 2002 and the PMLA Maintenance of Record Rules of 2005. These rules play a crucial role in preventing money laundering activities and combating the financing of terrorism.
This fine is part of a broader initiative by the Indian government to bring international exchanges in line with local regulations. In January, the government ordered the blocking of these exchanges’ URLs in India, and their apps were removed from Google and Apple app stores.
Binance and KuCoin were recently recognized as the first offshore crypto entities registered with the FIU, representing a significant milestone in meeting the stringent AML compliance requirements set by Indian authorities.
Binance is also facing regulatory challenges on a global scale. Earlier this year, the former CEO, Changpeng Zhao, was sentenced to four months in prison for violating US anti-money laundering laws. Furthermore, Binance is appealing against a $4.4 million fine in Canada for failing to register as a foreign money services business and not reporting large virtual currency transactions. This appeal comes after a $4.3 billion settlement in the United States for similar violations, which led to Binance exiting the Canadian market last year.