Binance Hit with $2.25 Million Fine by India’s FIU for AML Violations

India’s Financial Intelligence Unit (FIU) has imposed a fine of 188.2 million rupees ($2.25 million) on Binance, the world’s largest cryptocurrency exchange, for non-compliance with local anti-money laundering (AML) regulations. This is the highest ever fine imposed on any crypto entity for non compliance to AML laws in India.

According to Indian regulations, virtual digital asset service providers, including crypto exchanges, are required to register with the FIU as reporting entities and adhere to its AML rules. Binance’s failure to comply with these requirements led to the substantial penalty. The exchange has not yet responded to requests for comment regarding the fine.

#binance

Update from FIU – India 🇮🇳:

🚨 FIU imposed penalty of ₹18.82 Crores on Binance ($2.25 million)

✅Reasons for imposing Penalty:

1️⃣ Principal officer details not provided to FIU
2️⃣ No mechanism to detect suspicious transactions (ST)
3️⃣ Not informing FIU of ST pic.twitter.com/Akh8AJJsQ9

— CA Sonu Jain (Crypto Tax Expert) (@TheWeb3CA) June 20, 2024

Binance Registered with FIU After Receiving Show-Cause Notice

In an effort to resume operations in the country, Binance registered with the FIU in May after receiving show-cause notices from the watchdog. These notices were issued to nine offshore exchanges found to be operating in violation of local regulations. As part of its crackdown, the FIU also recommended that the Ministry of Electronics and Information Technology block online access to these exchanges.

This is not the first instance of a cryptocurrency exchange facing penalties for AML violations in India. In March, KuCoin, another major crypto exchange, registered with the FIU and was fined a smaller amount of 3.45 million rupees for similar infractions.
Binance has faced regulatory scrutiny globally.

In May, Canada’s anti-money laundering agency imposed a hefty fine of $4.38 million on the exchange for breaches of AML regulations. Additionally, Changpeng Zhao, Binance’s former CEO, was sentenced to four months in prison by U.S. District Judge Richard Jones in Seattle after pleading guilty to violating American AML laws.