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India’s financial intelligence unit fines Binance $2.25m for money laundering

India’s financial intelligence unit fines Binance $2.25m for money laundering

In a major regulatory setback, India’s Financial Intelligence Unit (FIU) has imposed a fine of $2.25 million (approximately 188.2 million rupees) on Binance, the world’s largest cryptocurrency exchange, for operating in the country without registering with the agency, as required by law.

According to an official statement obtained by The PUNCH, Binance, which had registered with the FIU in May after being issued a show-cause notice in December 2023, failed to comply with regulations and was found guilty of violating three sections of India’s Prevention of Money Laundering Act (PMLA) of 2002.

The FIU said that as a registered entity in India, Binance was obliged to adhere to statutory obligations under the PMLA, but it continued to provide services to Indian clients and operate within the country without doing so. The agency issued a notice to Binance in December 2023, compelling the exchange to demonstrate why it should not face action for its failure to comply with the law.

After considering Binance’s submissions, the FIU found that the charges against the exchange were substantiated and imposed a penalty of 18.82 crore rupees, equivalent to $2.25 million.

Binance is no stranger to regulatory issues. The exchange is currently facing trial in Nigeria for money laundering and tax evasion charges, accused of laundering over $35 million through its platform. The Federal Inland Revenue Service has also filed separate tax evasion charges against Binance.

The development is a blow to Binance, which had attempted to resume operations in India after being shut down by the government due to allegations of manipulating foreign exchange rates. The crackdown on cryptocurrency trading platforms has led to stricter oversight and increased scrutiny of companies operating in the sector.

This Article is Fact-Checked. See Policy.

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