Major Penalty for Non-Compliance
India’s Financial Intelligence Unit (FIU) has fined Binance, the world’s largest cryptocurrency exchange, approximately $2.2 million (18.82 crore INR). The penalty was imposed for providing services to Indian clients without adhering to the nation’s anti-money laundering rules. This enforcement action was announced on Thursday.
Key Points:
- Binance fined $2.2 million for AML violations.
- FIU approval in May was conditional to penalty payment.
- Binance and other exchanges received showcause notices in January 2024.
- Approval given after a hearing with FIU.
Showcause Notices and Initial Ban
In January 2024, Indian authorities issued showcause notices to Binance and several other offshore cryptocurrency exchanges. Subsequently, these exchanges were banned from operating in India for “operating illegally.” This is not the first time Binance has been issued a big fine like this. They have been fined heavily by Canadian authorities in the past as well
Conditional Approval in May
In May, India’s FIU approved Binance, along with KuCoin, as one of the first offshore crypto-related entities. However, this approval was conditional on the payment of a penalty after a formal hearing.
Substantiated Charges
The FIU stated, “After considering the written and oral submissions of Binance, the Director, FIU-IND, found that the charges against Binance were substantiated.”
Strict Compliance Urged
The FIU underscored the importance of compliance and urged all industry participants to strictly adhere to anti-money laundering (AML) and combating the financing of terrorism (CFT) laws. Dilip Chenoy, Chairman of the Bharat Web3 Association, emphasized, “We call upon all industry participants to strictly adhere to laws related to AML and CFT.”
Significance of the Penalty
The Director of FIU-IND ordered a total penalty of approximately $2.2 million on Binance. Additionally, specific directives were given to ensure diligent compliance with legal obligations.
Impact on Regulatory Compliance
This significant fine highlights the importance of regulatory compliance for cryptocurrency exchanges operating in India. The Binance fined episode serves as a crucial reminder of the stringent enforcement of financial regulations in the rapidly evolving digital asset space.
