Indian Regulator Imposes a $2.2 Million Fine on Binance

The Indian Financial Intelligence Unit (FIU) has fined Binance, the world’s largest cryptocurrency exchange, INR 188.2 million ( ~ $2.2 million) for failing to comply with anti-money laundering regulations. This enforcement action reflects India’s increasing enforcement of virtual digital asset service providers (VDASPs) under the Prevention of Money Laundering Act (PMLA) of 2002.

Concurrently, Binance is challenging a $4.4 million penalty by Canada’s financial watchdog.

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The Director of FIU-India determined that Binance operated in India without meeting statutory obligations under the PMLA. This decision came after an in-depth review of Binance’s submissions. Additionally, the order requires Binance to enhance its compliance protocols as per the PMLA and its 2005 rules, which aim to curb money laundering and terrorist financing.

This Indian fine is part of a larger initiative where international exchanges align with local regulations. Recently, Binance and KuCoin were recognized as the first offshore crypto entities registered with FIU, a crucial step in a sector where strict anti-money laundering compliance is required by Indian authorities.

Read more: Binance Review 2024: Is It the Right Crypto Exchange for You?

The push for registration began after December 2023, when FIU-IND issued notices to nine offshore crypto exchanges, including Binance. Concurrently, Apple removed non-compliant platforms from its App Store, and the IT Ministry blocked their websites, urging users to shift to compliant Indian exchanges.

Simultaneously, in Canada, Binance is appealing against a $4.4 million fine from the Financial Transactions and Reports Analysis Centre of Canada (Fintrac). The agency cited failures in registering as a foreign money services business and not reporting large virtual currency transactions. Binance argues that its Canadian operations were minimal and incidental to its global presence.

This appeal follows a series of regulatory issues for Binance, including a significant $4.3 billion settlement in the United States over anti-money laundering and sanctions violations. Last year, Binance decided to exit the Canadian market, underscoring its regulatory challenges across different regions.

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