Binance, the world’s largest cryptocurrency exchange, has recently been fined approximately $2.2 million (18.82 crore INR) by India’s Financial Intelligence Unit for providing services to Indian clients without following the country’s anti-money laundering regulations. This announcement came after Binance and other offshore cryptocurrency exchanges were issued showcause notices and subsequently banned from operating in India for allegedly doing so illegally in January 2024.
Despite this ban, Binance, along with KuCoin, became the first offshore crypto-related entities to be approved by India’s FIU in May. However, this approval was conditional to paying a penalty after a hearing with the FIU. The Director of FIU-IND stated that the charges against Binance were substantiated, leading to the imposition of a total penalty of approximately $2.2 million on the exchange.
In response to this development, Dilip Chenoy, Chairman of the Bharat Web3 Association, emphasized the importance of all industry participants strictly adhering to laws related to anti-money laundering and combating the financing of terrorism. The FIU also issued specific directions to Binance to ensure diligent compliance with these obligations.
Binance has not yet provided a comment on this matter in response to a request from CoinDesk. It is crucial for cryptocurrency exchanges and other industry players to prioritize compliance with regulations to maintain trust and legitimacy in the rapidly evolving digital asset landscape.
UPDATE (June 20, 12:40 UTC): The Bharat Web3 Association has also commented on this issue, urging industry participants to comply with AML and CFT laws. The article also mentions that CoinDesk, the source of this information, operates as an independent subsidiary with an editorial committee to uphold journalistic independence.
Overall, this fine imposed on Binance by India’s FIU serves as a reminder of the importance of regulatory compliance in the cryptocurrency industry. As the sector continues to grow and attract mainstream attention, adhering to anti-money laundering and counterterrorism financing laws is essential for the long-term sustainability and credibility of exchanges and other crypto-related entities.