Binance Fined $2.25 Million by India's FIU for Breaching Anti-Money Laundering Rules
Summary:
India's Financial Intelligence Unit (FIU-IND) has fined cryptocurrency exchange, Binance, 188.2 million rupees ($2.25 million) for not complying with the nation’s Anti-Money Laundering regulations while providing services to Indian clients. Binance, a Virtual Digital Asset Service Provider, failed to maintain and report transaction records, furnish necessary information to authorities, and preserve mandated records. Binance has previously faced regulatory penalties from other countries, including Canada and Nigeria.
Binance, a renowned digital asset provider, has been slapped with a hefty penalty of 188.2 million rupees (approximately $2.25 million) by India's Financial Intelligence Unit (FIU-IND). This fine is the consequence of Binance's failure to honour India's Anti-Money Laundering norms while delivering services to Indian consumers. On Thursday, June 19, the Anti-Money Laundering body in India disclosed that the fine covers several breaches of the Prevention of Money Laundering Act (PMLA) of 2002.
Binance, by virtue of being a Virtual Digital Asset Service Provider, is defined as a reporting entity (RE) under Section 2(sa)(vi) of PMLA. This status necessitates keeping and reporting transactional data, alongside enforcing strict Anti-Money Laundering (AML) strategies. Unfortunately, the FIU-IND's inquiry demonstrated that Binance devalued these obligations while catering to Indian clients.
In January 2024, the Indian authorities issued notices to Binance along with other offshore cryptocurrency exchanges, declaring their operations as illegal and henceforth expelling them from India. Later in May, the first-ever approval from India's Financial Intelligence Unit (FIU) was granted to Binance and KuCoin - both offshore crypto-related entities. This approval was dependent on the payment of a fine after a consultation with the FIU.
Despite these actions, the FIU pointed out that subsequent to reviewing Binance Director's oral and written submissions, definitive evidence suggested that charges levelled against Binance were valid. The penalty levied against Binance includes failure to maintain and report transaction data, not sharing necessary information with authorities, and lacking in records preservation.
Binance has had regulatory penalties from other countries too. In May, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) revealed a $4.4 million administrative monetary penalty imposed on Binance for neglecting to register and report significant transactions in digital assets. The regulator expressed that Binance had failed to register as a foreign money services business and to report digital currency transactions exceeding $10,000. Binance subsequently challenged this decision, objecting to the allegations of noncompliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) rules.
In a separate incident from February, Nigeria authorities detained two Binance executives following claims of tax evasion and money laundering within the company.
Published At
6/20/2024 9:56:16 AM
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