The Financial Intelligence Unit of India (FIU-IND) imposed a fine of Rs 188.2 million

The Financial Intelligence Unit of India (FIU-IND) has fined cryptocurrency exchange Binance Rs 188.2 million ($2.25 million) for providing services to customers Indians without adhering to the country’s anti-money laundering rules.

India’s Anti-Money Laundering Unit announced on Thursday (June 19) that the sanction would apply to multiple violations of the Prevention of Money Laundering Act, 2002 (PMLA).

Background of the case

Binance operates as a virtual digital asset service provider, which qualifies it as a reporting entity (RE) under Section 2(sa)(vi) of the PMLA. This classification requires maintaining and reporting records of transactions and ensuring that strong anti-money laundering (AML) measures are in place.

However, an investigation by the FIU-IND found that Binance failed to meet these commitments while providing services to Indian customers. Indian authorities have issued show cause notices to Binance and several other offshore cryptocurrency exchanges and expelled them from India for “illegal operation” in January 2024.

In May, Binance became the first cryptocurrency-related offshore entity, alongside KuCoin, to receive approval from India’s Financial Intelligence Unit (CRF). Approval was conditional on payment of a fine after a hearing with the financial intelligence unit.

Order clarifying the fine imposed on Binance by the Indian Financial Intelligence Unit Source: FIU-INDIA

Regulatory violations and procedures

However, the FIU announcement states that after reviewing the written and oral submissions made by the Director of Binance, FIU-IND, based on the documents available on file, it was found that the accusations against Binance were proven.

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The FIU-IND fine against Binance cites multiple violations, including failure to maintain and report transaction records, failure to provide required information to authorities, and failure to maintain records as required.

Regulatory fines from other countries

In May, the Financial Transactions and Reports Analysis Center of Canada (FINTRAC) announced that it would impose an administrative fine of $4.4 million on Binance for failing to record and report large transactions in digital assets.

According to the regulator, Binance failed to register as a foreign financial services company and report cryptocurrency transactions exceeding $10,000.

However, the cryptocurrency exchange has filed an appeal against the FINTRAC director over allegations of non-compliance with anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations.

In February, Nigerian authorities arrested two Binance executives following allegations of tax evasion and money laundering at the company.

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