Binance fined in India for failure to implement anti-money laundering measures, facing a hefty penalty of $2.25 million

The Financial Intelligence Unit (FIU IND) of the Indian Ministry of Finance announced yesterday, on the 19th, that it will impose a fine of approximately $2.25 million on Binance for non-compliance with anti-money laundering regulations. Previously, Indian authorities issued a final warning to Binance and other overseas exchanges, prohibiting them from operating illegally in India.

India delists Binance, Kraken, and nine other exchanges, with their official websites, Google, and Apple stores being completely blocked.

Binance Fined $2.25 Million by India

The Financial Intelligence Unit (FIU) of India has stated that Binance did not comply with the Anti-Money Laundering (AML) regulations while offering cryptocurrency trading services to Indian users.

The authorities mentioned that as a Virtual Digital Asset Service Provider (VDA SP), Binance was identified as a reporting entity and was required to maintain and submit transaction records continuously to ensure proper anti-money laundering measures.

Subsequently, after reviewing Binance's written and oral statements, as well as the company's existing data, FIU charged and penalized the exchange for failing to comply with the aforementioned obligations:

We have taken appropriate action against this misconduct and fined them $2.25 million (INR 188.2 crore) under the Prevention of Money Laundering Act (PMLA) of 2002.

Binance and KuCoin Among the First Exchanges to Return to India

Last December, nine overseas exchanges received notices of non-compliance from the FIU and were set to be completely blocked in January this year. In response, companies like OKX and BitStamp have announced their exit from the country.

As a condition for returning to India, exchanges were required to accept penalties for previous violations. Binance and KuCoin agreed to this and became the first overseas exchanges to receive approval from FIU to operate, as reported last month here.

However, India's imposition of a 30% capital gains tax on cryptocurrency and NFTs since last year, along with a 1% tax on each crypto transaction, has caused hesitation among exchanges and other crypto firms.

India to Impose 30% Capital Gains Tax on NFTs and Cryptocurrency, Plans to Launch Digital Rupee by 2023

Continued Scrutiny on Binance

Over the past two years, Binance has been under intense scrutiny due to its scale, with major cases including:

• United States: In November last year, the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ) imposed the largest financial sanctions on Binance, amounting to $4.3 billion.
• Nigeria: In February this year, Nigerian authorities accused Binance of rate manipulation and tax evasion, seeking billions in damages and detaining two Binance executives to date.
• Philippines: In March this year, the Philippine Securities and Exchange Commission (SEC) took measures to block Binance's website and app, citing threats to the financial security of the local population.
• Canada: In May this year, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) fined Binance $4.4 million for failure to register and report large transactions as required by law. Binance has since appealed this charge, as reported here.

Nigerian High Court Dismisses Human Rights Suit of Fleeing Binance Executives: No One Appeared in Court