Binance, the world’s largest cryptocurrency exchange, has been fined approximately $2.25 million (18.82 crore INR) for failing to comply with India’s anti-money laundering regulations. India’s enforcement agency, the Prevention of Money Laundering Act (PMLA), levied the penalty.
Binance got into a line of fire with India’s Financial Intelligence Unit (FIU) in December 2023. The Financial Intelligence Unit (FIU) demanded that the exchange provide a justification for not taking appropriate action against it due to PMLA compliance violations. Binance, along with many other offshore cryptocurrency exchanges, had received show-cause notices from Indian authorities in January 2024. Allegations of being an unlawful platform led to their ban from India.
India’s Financial Intelligence Unit (FIU) approved Binance and its sister platform, KuCoin, in May of the same year, making them the first offshore crypto-related entities. However, the FIU granted the permission conditional on Binance paying a penalty after its hearing.
Additionally, the FIU’s order specified that BINANCE has been issued specific directives to ensure that all sections are adhered to with the utmost care, in accordance with chapter IV of the Prevention of Money Laundering Act (PMLA), 2002.
Binance has been subjected to penalties on numerous occasions for failing to comply with anti-money laundering (AML) regulations. The lack of clarity in its business relationships with various counterparts has become a significant problem for Binance. For instance, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) fined Binance $4.3 million on May 7, despite Binance’s collaboration with institutional investors and significant increased activity in identifying and reporting money-laundering activities.
Nearly half a year had passed since the sanctioned cryptocurrency exchange firm agreed to pay $4.3 million. By December of the same year, the bank stated that it had compensated the U.S. authorities with $3 billion for AML and sanctions violations. As part of the settlement, Changpeng Zhao, the CEO of Binance and the company’s founder, consented to the admission of numerous charges and the payment of $50 million in penalties. At present, CZ is residing at the CAP Lompoc II compound, where he is obligated to serve a four-month sentence of detention.
The FIU concluded that the allegations against Binance were corroborated by the evidence and written and oral submissions of Binance, as outlined in the FIU-IND statement. Binance was subsequently issued “specific directions to adhere both in letter and spirit to the obligations” by the Director of FIU-IND, who also imposed a “total penalty” of approximately $2.2 million.
Additionally, the Chairman of the Bharat Web3 Association, Dilip Chenoy, appealed to all industry stakeholders to adhere to the laws that regulate the financing of terrorism (CFT) and anti-money laundering (AML).
