KEY POINTS
India’s Financial Intelligence Unit (FIU-IND) has imposed a penalty of 188.2 million rupees ($2.25 million) on crypto exchange Binance due to its failure to adhere to domestic anti-money laundering (AML) laws.
Details of the Case
Binance is identified as a reporting entity (RE) per the Prevention of Money Laundering Act (PMLA), 2002. As an RE, Binance must keep and report transaction records and enforce strong AML protocols.
Despite this, FIU-IND’s probe showed that Binance did not meet these requirements when serving Indian customers.
The FIU-IND’s fine on Binance cites multiple contraventions, including failure to maintain and report transaction records, non-furnishing of required information, and failing to preserve records.
Indian regulators had earlier sent show-cause notices to Binance and other foreign cryptocurrency exchanges, resulting in their expulsion from India in January 2024 for “illegal operations.”
Subsequently, in May, Binance became the first offshore crypto-related entity, along with KuCoin, to gain approval from India’s FIU. However, this approval was conditional on paying a penalty after a hearing with the FIU.
Global Regulatory Scrutiny
Binance is not new to regulatory challenges. In May, Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) imposed a $4.4 million administrative monetary penalty on Binance for failing to register and report large transactions in digital assets.
Last year, Binance CEO Changpeng Zhao resigned after admitting to money laundering violations. The Department of Justice imposed Binance to pay over $4 billion in fines, with Zhao personally contributing $50 million.
