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India imposes a $2.2 million fine on Binance for violating Anti-Money Laundering regulations

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Binance Fined $2.25 Million In India For Breaching Anti-Money Laundering Regulations

India’s Financial Intelligence Unit (FIU) has fined Binance $2.25 million (approximately Rs. 18.8 crore) for not complying with the Prevention of Money Laundering Act, 2002 (PMLA). The financial watchdog made this announcement on Thursday, June 20. India has accused Binance, the world’s largest crypto exchange, of not following the necessary laws to operate in the country.

The FIU in India has clarified the reason for the fine imposed on Binance. According to the official statement from the exchange, India had issued a notice to Binance questioning its services to Indian citizens without adhering to the PMLA.

“A notice dated December 28, 2023, was sent to Binance under Section 13 of the Act, asking Binance to explain why no action should be taken against it for not fulfilling its duties under the Act, despite being a reporting entity as a Virtual Digital Asset Service Provider,” stated FIU’s statement.

Binance was informed both in writing and verbally about FIU’s concerns. The FIU has confirmed that Binance breached India’s legal requirements for operating its business in the country.

“Therefore, the Director of FIU-IND issued a penalty of Rs. 18,82,00,000 (Rupees Eighteen Crore Eighty Two Lakh Only) on June 19, 2024, under Section 13 PMLA,” the financial authority stated.

The US-based exchange has been instructed to ensure compliance with India’s PMLA act promptly. Binance has not yet responded to this development.

India’s crypto community has reacted to this news, urging other Web3 players to take this fine as a warning of the consequences of not following regulations.

“This hefty penalty highlights the growing scrutiny and regulation in the digital asset space. It’s important to stay informed about such developments to navigate this changing landscape successfully,” said Shivam Thakral, CEO of BuyUcoin to Gadgets360. “Regulations are becoming more organized for cryptocurrency exchanges worldwide. Compliance is essential for user protection and conducting business confidently.”

Indian crypto stakeholders believe that the country can become a Web3 leader due to its large developer pool. They stress the importance of compliance with legal requirements to make the crypto sector safer for investors.

“India ranks high for digital asset ownership. In such a significant market, implementing a regulatory framework is crucial to safeguard user funds and create a favorable environment for businesses,” said Manhar Garegrat, Country Head India and Global Partnerships, Liminal Custody to Gadgets360.

Binance claimed to have registered with the FIU in India last month to attract India’s crypto community to its platform. The exchange has previously faced compliance issues with American and Nigerian authorities regarding the crypto sector rules.

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