India’s Financial Intelligence Unit (FIU) has fined crypto exchange Binance 188.2 million rupees ($2.25 million) for violating the country’s Anti-Money Laundering (AML) rules while providing services to Indian clients.
On June 19, the agency announced that the penalty resulted from multiple violations of the Prevention of Money Laundering Act (PMLA), 2002.
Binance, as a Virtual Digital Asset Service Provider, is classified as a reporting entity under Section 2 (as) (vi) of the PMLA. This classification mandates that Binance maintain and report transaction records and implement robust AML measures.
However, the FIU’s investigation found that Binance failed to comply with these requirements when serving Indian clients.
Indian authorities issued show-cause notices to Binance and other offshore cryptocurrency exchanges, banning them from India for “operating illegally” in January 2024.
In May, Binance, along with KuCoin, was the first offshore crypto-related entity to be approved by the Financial Intelligence Unit.
This approval was conditional on paying a penalty after a hearing with the FIU.
The FIU’s announcement stated that the charges against Binance were confirmed after reviewing the director’s written and oral submissions.
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The fine on Binance covers multiple violations, including failing to maintain and report transaction records, not providing required information to authorities, and not preserving records as mandated.
In May, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposed a $4.4 million administrative penalty on Binance for failing to register and report large digital asset transactions.
According to FINTRAC, Binance failed to register as a foreign money services business and report digital currency transactions exceeding $10,000.
Binance has appealed against FINTRAC’s director over allegations of noncompliance with AML and Countering the Financing of Terrorism regulations.
In February, Nigerian authorities detained two Binance executives following allegations of tax evasion and money laundering at the company.
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