Binance has been fined $2.2 million by the Indian FIU for failing to comply with anti-money laundering regulations under the PMLA.
The Indian Financial Intelligence Unit (FIU) has imposed a sanction of INR 188.2 million (~ $2.2 million) on Binance, the world’s largest cryptocurrency exchange, for failing to comply with anti-money laundering requirements. This enforcement action is indicative of the escalating enforcement of virtual digital asset service providers (VDASPs) in India under the Prevention of Money Laundering Act (PMLA) of 2002.
Binance is concurrently contesting a $4.4 million sanction imposed by Canada’s financial regulator. The Director of FIU-India concluded that Binance failed to comply with the statutory obligations outlined in the PMLA while conducting business in India. Binance’s submissions were thoroughly examined prior to this determination. Furthermore, the order mandates that Binance improve its compliance protocols in accordance with the PMLA and its 2005 regulations, which are designed to prevent the financing of terrorism and money laundering.
The FIU stated that the allegations against Binance were substantiated after the Director, FIU-IND, reviewed the written and oral submissions of Binance. This determination was made based on the material available on record.
This Indian sanction is a component of a broader initiative that ensures international exchanges are in accordance with local regulations. Binance and KuCoin were recently acknowledged as the first offshore crypto entities to be registered with the Financial Intelligence Unit (FIU). This recognition is a critical milestone in a sector where Indian authorities mandate stringent anti-money laundering compliance.
After December 2023, the FIU-IND issued notices to nine offshore crypto exchanges, including Binance, which prompted the drive for registration. Simultaneously, Apple removed non-compliant platforms from its App Store and the IT Ministry blocked their websites, encouraging users to transition to compliant Indian exchanges.
The Financial Transactions and Reports Analysis Centre of Canada (Fintrac) has imposed a $4.4 million sanction on Binance, which is currently appealing the decision. The agency attributed its failure to report significant virtual currency transactions to its failure to register as a foreign money services business. Binance contends that its Canadian operations were outside and minimal in comparison to its global presence.
Binance has faced a series of regulatory challenges, including a substantial $4.3 billion settlement in the United States for anti-money laundering and sanctions violations. This appeal is the latest in a series of challenges. Last year, Binance made the decision to withdraw from the Canadian market, which underscores the regulatory obstacles it faces in various regions.
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