Binance has been fined $2.25M by India’s Financial Intelligence Unit.
India's Financial Intelligence Unit (FIU) has fined crypto exchange Binance 188.2 million rupees ($2.25 million) for providing services to Indian customers without complying with the country's anti-money laundering (AML) laws.
On Thursday, June 19, the agency announced that the penalty would apply to several violations of the Prevention of Money Laundering Act, 2002 (PMLA).
The background of the case
Binance operates as a virtual digital asset service provider, which qualifies it as a Reporting Entity (RE) under Section 2(as)(vi) of the PMLA. This designation requires maintaining and reporting transaction records and ensuring robust AML measures.
However, FIU's investigation found that Binance failed to comply with these obligations when providing services to Indian customers. Indian authorities have issued show cause notices to Binance and several other offshore crypto exchanges, banning them from India in January 2024 for “operating illegally”.
In May, Binance became the first offshore crypto-linked entity to be approved by the Financial Intelligence Unit, along with KuCoin. The approval was conditional on paying a fine after hearing with the FIU.
Violations and control measures
However, according to the FIU notice, based on the material on the record, the charges against Binance have been confirmed considering the director's written and oral submissions.
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The FIU's fine against Binance cites several violations, including failure to comply with transaction records and reporting, failure to provide required information to authorities, and failure to maintain records as mandated.
Regulatory penalties from other countries
In May, Canada's Financial Transactions and Reports Analysis Center (FINTRAC) announced that it would impose a $4.4 million administrative fine on Binance for failing to record and report large transactions in digital assets.
According to the regulator, Binance failed to register as a foreign currency services business and reported digital currency transactions in excess of $10,000.
However, the cryptocurrency exchange appealed to the director of FINTRAC for non-compliance with the AML and counterterrorism financing regulations.
In February, Nigerian authorities arrested two Binance officials following allegations of tax evasion and money laundering in the company.
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