India Fines Binance $2.2 Million for Violating Anti-Money Laundering Laws
India’s Financial Intelligence Unit (FIU) has slapped a fine of $2.25 million (approximately Rs. 18.8 crore) on Binance. The financial watchdog announced the development on Thursday, June 20. India has alleged that the cryptocurrency exchange, touted as the world’s largest, failed to comply with the Prevention of Money Laundering Act, 2002 (PMLA), which crypto firms must adhere to in order to operate in the country.
India’s FIU Fines Binance
According to the exchange’s official statement, India has issued a notice questioning Binance for providing the service to Indian citizens without complying with the PMLA laws.
“A notice dated December 28, 2023 has been sent to Binance pursuant to Article 13 of the Act, compelling Binance to demonstrate why no appropriate measures should be taken against it for its neglect of its duties under the Act, despite its status as a reporting entity due to its activities as a Virtual Digital Asset Service Provider,” the FIU said. statement said.
Binance was reportedly informed of FIU’s concerns both in writing and verbally. The FIU has said that the allegations regarding Binance violating India’s regulatory requirements to do business here are substantiated.
“Therefore, by order dated 19th June 2024, the Director of FIU-IND, in exercise of his powers under Section 13 PMLA, has imposed a total penalty of Rs. 18,820,000 (Rupees eighteen crore eighty-two lakh),” the financial regulator said.
The US stock exchange has been ordered to comply with India’s PMLA law as soon as possible.
Binance Responds
In a statement shared with Gadgets360, a Binance spokesperson indicated that the exchange is currently reviewing the FIU-IND order.
“We are keen to work with the FIU as a reporting entity and are excited about re-entering the Indian market to make a positive contribution, should we be able to do so in the near future. We remain committed to ensuring regulatory compliance,” the company spokesperson said.
Indian Crypto Circle Reacts
Speaking to Gadgets360, members of the Indian crypto community urged other Web3 players in the country to view the fine on Binance as a lesson on the consequences companies can face if they fail to comply with the law.
“This significant fine is a clear indication of the increasing scrutiny and regulation in the digital asset space. It is essential to stay informed and updated with such developments to successfully navigate this changing landscape,” Shivam Thakral, CEO of BuyUcoin, told Gadgets360. “I believe that the regulatory environment is becoming more organized for cryptocurrency exchanges globally. The need for compliance is crucial to protect users and conduct business in a fear-free environment.”
Crypto stakeholders in India realize that the country has the potential to become a leader in the Web3 space due to its large developer pool. Therefore, they believe that adhering to regulatory requirements is important to make the crypto sector, which is otherwise notoriously risky and volatile, safer for the investment community to deal with.
“According to a research report, India is one of the top countries in terms of digital asset ownership. In such a large digital asset market, it is imperative to implement a regulatory framework for the protection of user funds and provide a friendly environment for businesses,” Manhar Garegrat, Country Head India and Global Partnerships, Liminal Custody told Gadgets360.
Binance claimed that it had registered with the FIU in India last month. The exchange did not want to miss the opportunity to gather the Indian crypto community on its platform.
The crypto exchange has previously had conflicts with US and Nigerian authorities over alleged non-compliance with their respective crypto sector oversight regulations.
