India’s Financial Intelligence Unit (FIU) has delivered a hefty fine of INR 18.82 core ($2.25 million) to cryptocurrency exchange Binance for breaching Anti-Money Laundering (AML) regulations while catering to Indian clientele.
The FIU made this announcement on June 19, revealing that the penalty stems from multiple violations of the Prevention of Money Laundering Act (PMLA), 2002.
Binance functions as a Virtual Digital Asset Service Provider, a classification that places it under the reporting entity (RE) category as defined in Section 2 (as) (vi) of the PMLA. This designation mandates rigorous adherence to transaction record maintenance, reporting standards, and robust AML protocols.
However, an investigation by the FIU uncovered significant lapses on Binance’s part in meeting these obligations while servicing its Indian user base. Earlier in January 2024, Indian authorities had issued show-cause notices to Binance and several other offshore cryptocurrency exchanges, accusing them of illegal operations within the country.
In a notable turn of events in May, Binance, alongside KuCoin, achieved approval from the Financial Intelligence Unit. This approval hinged on the condition that a penalty would be imposed following deliberations with the FIU.
The FIU’s official statement acknowledged that the charges against Binance were substantiated based on a thorough review of available evidence, including submissions from the exchange’s leadership. Key infractions cited in the fine include failure to maintain and report transaction records, inadequacy in providing requisite information to authorities, and non-compliance with statutory record retention mandates.
