NEWS
In a major regulatory move, India’s Financial Intelligence Unit (FIU) has imposed a fine of approximately $2.2 million (188.2 million rupees) on Binance, the world’s largest cryptocurrency exchange, for non-compliance with the country’s anti-money laundering (AML) laws.
As a Virtual Asset Service Provider (VASP), Binance is classified as a reporting entity (RE) under Section 2(sa)(vi) of the Prevention of Money-Laundering Act. This designation requires the exchange to maintain and report transaction records and implement robust AML measures, as reported by Cointelegraph. However, the FIU found that Binance failed to comply with these regulations while serving Indian clients.
“After considering the written and oral submissions of Binance, the Director of FIU, based on the material available on record, found that the charges against Binance were substantiated,” stated the FIU.
The fine was announced following a series of show-cause notices issued to Binance and other offshore crypto exchanges in January 2024, which accused them of operating illegally within India. Despite these challenges, Binance and KuCoin were later approved by the FIU in May, provided they paid the penalties.
The FIU’s decision highlights the critical importance of adherence to AML and combating the financing of terrorism (CFT) regulations for all industry participants. Dilip Chenoy, Chairman of the Bharat Web3 Association, also stressed the need for strict compliance with these laws. The FIU’s order includes specific directives to ensure Binance fulfills all legal obligations going forward.
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