Regulation
India fines Binance $2.2 million for AML violations
India’s Financial Intelligence Unit (FIU) has fined Binance, the world’s largest cryptocurrency exchange, INR 188.2 million (~$2.2 million) for non-compliance with anti-money laundering regulations. This enforcement action reflects India’s increasing enforcement of virtual digital asset service providers (VDASPs) under the Prevention of Money Laundering Act (PMLA) of 2002.
Meanwhile, Binance is contesting a $4.4 million penalty imposed by Canada’s financial watchdog.
Binance overcomes regulatory challenges
Director of FIU-India determined that Binance was operating in India without fulfilling its statutory obligations under the PMLA. This decision came after a thorough review of Binance’s submissions. Additionally, the order requires Binance to improve its compliance protocols in accordance with the PMLA and its 2005 Rules, which aim to combat money laundering and terrorist financing.
“After reviewing Binance’s written and oral submissions, the Director of the FIU-IND, based on the materials available in the file, concluded that the accusations against Binance were founded,” the FIU said.
This Indian fine is part of a larger initiative where international trade aligns with local regulations. Recently, Binance and KuCoin have been recognized as the first offshore crypto entities registered with the FIU, a crucial step in an industry where strict anti-money laundering compliance is required by Indian authorities.
Learn more: Binance Review 2024: Is It the Right Crypto Exchange for You?
The registration campaign started after December 2023, when FIU-IND issued notices to nine offshore crypto exchanges, including Binance. In parallel, Apple removed non-compliant platforms from its App Storeand the IT ministry blocked their websites, urging users to switch to compliant Indian exchanges.
Simultaneously, in Canada, Binance is attractive against a fine of $4.4 million from the Financial Transactions and Reports Analysis Center of Canada (FINTRAC). The agency cited failures in registering as a foreign money services business and failure to report large virtual currency transactions. Binance argues that its Canadian operations were minimal and incidental to its global presence.
This appeal follows a series of regulatory questions regarding Binance including large $4.3 billion US settlement on combating money laundering and sanctions violations. Last year, Binance has decided to leave the Canadian markethighlighting its regulatory challenges in different regions.
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