Binance a cryptocurrency exchange penalized with a 225m fine by the financial regulator
Binance, the cryptocurrency exchange, has been fined $2.25 million by India’s Financial Intelligence Unit (FIU) for operating in the country without complying with local anti-money laundering (AML) rules. The FIU stated in an official statement on June 19 that it imposed a penalty of 188.2 million rupees (approximately $2.25 million) on Binance for violating multiple AML rules and directives aimed at combating the financing of terrorism. Binance has not made any public statements regarding the fine.
India is considered one of the fastest-growing crypto economies, with the highest adoption rate as of 2023, according to a report by Chainalysis. In mid-April, Binance agreed to pay a $2 million penalty after being banned by the FIU for four months.
Prior to the ban in January, Binance reportedly dominated over 90% of the crypto trading volume in India. The exchange gained popularity as traders sought to avoid tax implications imposed by the Indian government.
In March, India’s Ministry of Finance mandated that all crypto businesses register with the FIU and comply with provisions of the Prevention of Money Laundering Act (PMLA). By December 2023, 28 cryptocurrency firms had already registered with the national AML agency, as reported by crypto.news.
The regulation of crypto remains a contentious issue in India, with regulators having differing opinions on how to approach the emerging industry. India’s Minister of Finance, Nirmala Sitharaman, has called for international collaboration in developing a comprehensive crypto framework and urged governments to consider the merits of blockchain technology. However, the Reserve Bank of India maintains its stance on crypto and advocates for a complete ban on digital assets.
