Binance is yet again under legal fire – this time from the Indian financial agency. The Indian Financial Intelligence Unit (FIU) has issued a penalty of $2.25 million (Rupees 188.2 million) to Binance for failing to abide by the nation’s Prevention of Money Laundering Act (PMLA), 2002.
This financial watchdog previously banned it from providing services to Indian customers through a show cause notice. Numerous offshore exchanges servicing Indian clients also received such notices.
The FIU announced on 19 June 2024 that Binance, considered a Reporting Entity (RE), failed to maintain anti-money laundering (AML) protocols while operating as a Virtual Digital Asset Service Provider (VDA SP) in India.
Indian laws dictate that crypto service providers follow the jurisdiction’s stringent AML laws.
However, Binance facilitated money laundering and failed to relay mandatory transaction records to the FIU and other government agencies.
It may have not even preserved such records for reporting purposes, according to the charges levied against it.
“After considering the written and oral submissions of the Binance Director, FIU-IND, based on the material available on record, found that the charges against Binance were substantiated,” read the FIU’s announcement.
The penalty comes after Binance was allowed to reinstate its services in India on the condition that it would get into a hearing with the government agency and face the tune of its actions.
Binance has also received guidance from the FIU to maintain a robust AML program and reporting procedures going forward as it continues offering its services to Indian crypto enthusiasts.
It will have to take AML-related processes seriously in India to avoid additional fines in the future.
The exchange also faces possible fines in another jurisdiction – Canada. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) penalized Binance by $4.4 million for failing to register as a money services business and report transactions exceeding $10,000. However, Binance has appealed to dismiss the charges.
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