India’s Financial Intelligence Unit (FIU) has levied a $2.25 million fine (equivalent to 188.2 million rupees) against Binance, the world’s largest cryptocurrency exchange. The fine comes as a result of Binance operating in India without registering with the agency, as mandated by Indian law.
This information was revealed in a statement available on the FIU’s official website on Thursday, as reported by The PUNCH.
The FIU detailed that Binance breached three sections of India’s Prevention of Money Laundering Act (PMLA) of 2002. This adds to the series of legal challenges faced by Binance globally, including an ongoing trial in Nigeria for money laundering and tax evasion.
In Nigeria, the Economic and Financial Crimes Commission has accused Binance of laundering over $35 million through its platform. Additionally, the Federal Inland Revenue Service has filed separate tax evasion charges against the exchange.
Binance registered with the FIU in May, aiming to restart operations in India after receiving a show-cause notice from the financial regulator in December 2023. Despite this registration, Binance failed to comply with necessary regulations, resulting in the substantial fine.
According to the FIU’s statement:
- Binance, as a Virtual Digital Asset Service Provider, is considered a reporting entity under Section 2(1)(wa) of the PMLA.
- Binance continued to operate and provide services in India without adhering to its legal obligations under the PMLA, prompting the FIU to issue a notice on December 28, 2023.
- After reviewing Binance’s submissions, the FIU determined that the charges were substantiated and imposed the penalty on June 19, 2024.
In another related issue, Binance ceased its naira-dollar services after the Nigerian government accused it of manipulating foreign exchange rates. This led to intensified scrutiny and stricter regulations on crypto trading platforms in the country.
On February 28, Nigerian authorities detained two senior Binance executives, Nadeem Anjarwalla and Tigran Gambaryan, following a meeting in Nigeria, despite a national ban on cryptocurrency channels. The Federal High Court recently dismissed tax evasion charges against these executives, but the Federal Inland Revenue Service has filed amended charges, now naming Binance as the sole defendant.
These developments mark significant regulatory actions against Binance as authorities worldwide tighten oversight on cryptocurrency operations to curb illegal financial activities.
