Order

India’s Financial Intelligence Unit (FIU) has imposed a 188.2 million rupees ($2.25 million) fine on crypto exchange Binance for providing services to Indian clients without adhering to the nation’s Anti-Money Laundering (AML) rules.
On Thursday, June 19, the agency <a href="https://fiuindia.gov.in/pdfs/judgements/Binance_Order_10_2024.pdf" target="_blank" rel="noopener nofollow">announced</a> that the penalty applies to multiple violations of the Prevention of Money Laundering Act (PMLA), 2002. 
<h2 data-ct-non-breakable="true" id="background-of-the-case">Background of the case</h2>
Binance operates as a Virtual Digital Asset Service Provider, which qualifies it as a reporting entity (RE) under Section 2 (as) (vi) of the PMLA. This designation requires maintaining and reporting transaction records and ensuring robust AML measures.&nbsp;
However, FIU’s investigation revealed that Binance failed to adhere to these obligations when providing services to Indian clients. Indian authorities&nbsp;<a href="https://cointelegraph.com/news/apple-india-binance-kraken-crypto-exchanges-delist-fiu-notice">issued show-cause notices</a> to Binance and several other offshore cryptocurrency exchanges, banning them from India for “operating illegally” in January 2024.
In May, Binance became the first offshore crypto-related entity, along with KuCoin, to be <a href="https://cointelegraph.com/news/binance-gets-fiu-approval-india-return">approved by the Financial Intelligence Unit</a>. The approval was conditional on paying a penalty after a hearing with the FIU.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-06/a32c6b1f-e9d2-41e2-9724-2db907619f88.png" alt="" title="">
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 Order stating Binance’s fine. Source: FIU
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<h2 data-ct-non-breakable="true" id="violations-and-regulatory-action">Violations and regulatory action</h2>
However, the FIU announcement noted that, based on the material available on record, the charges against Binance were substantiated after considering the director’s written and oral submissions.&nbsp;
Related:&nbsp;<a href="https://cointelegraph.com/news/nigerian-court-dismisses-binance-exec-suit"></a><a href="https://cointelegraph.com/news/nigerian-court-dismisses-binance-exec-suit">Nigerian High Court dismisses Binance exec’s suit over detention</a><a href="https://cointelegraph.com/news/nigerian-court-dismisses-binance-exec-suit"></a>
The FIU’s fine on Binance cites multiple contraventions, including failing to maintain and report transaction records, not furnishing required information to authorities and not preserving records as mandated. 
<h2 data-ct-non-breakable="true" id="regulatory-fines-from-other-countries">Regulatory fines from other countries</h2>
In May, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced it was <a href="https://cointelegraph.com/news/canada-binance-aml-cft-violations">imposing a $4.4 million administrative monetary penalty</a> on Binance for failing to register and report large transactions in digital assets.
According to the regulator, Binance failed to register as a foreign money services business and report digital currency transactions exceeding $10,000. 
However, the cryptocurrency exchange <a href="https://cointelegraph.com/news/binance-appeal-fine-canada-fintrac">appealed against the director of FINTRAC</a> over allegations of noncompliance with AML and Countering the Financing of Terrorism regulations. 
In February, Nigeria authorities <a href="https://cointelegraph.com/news/nigerian-court-dismisses-binance-exec-suit">detained two Binance executives</a> following allegations of tax evasion and money laundering at the company. 
Magazine: <a href="https://cointelegraph.com/magazine/polkadot-indy-500-driver-conor-daly-dad-holds-dot/">Polkadot’s Indy 500 driver Conor Daly: ‘My dad holds DOT, how mad is that?’</a>

Binance fined $2.25M by India’s Financial Intelligence Unit

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Cointelegraph

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