Binance Penalized $2.25 Million in India: Signal of Tougher Cryptocurrency Oversight?

• India’s FIU fined Binance $2.25M for AML breaches under PMLA.
• Binance failed to maintain transaction records and report required information to Indian authorities.
• Similar regulatory actions in Canada and Nigeria highlight global scrutiny on Binance’s compliance with AML laws.

Binance has been fined 188.2 million rupees ($2.25 million) by India’s Financial Intelligence Unit (FIU) for breaking anti-money laundering (AML) laws. The FIU’s ruling, which was made public on Thursday, June 19, highlights several violations of the Prevention of Money Laundering Act (PMLA), 2002 in India.

According to Section 2(as)(vi) of the PMLA, Binance, as a Virtual Digital Asset Service Provider, is a reporting entity (RE). This classification requires strict reporting, record-keeping, and transaction monitoring protocols to prevent illegal financial activities.

According to FIU’s investigation, Binance violated these regulations in its exchanges with Indian clients, despite these requirements. The move comes after a warning was given by Indian authorities in January 2024 that barred Binance and other offshore cryptocurrency exchanges from conducting business in the nation on the basis that they were involved in illegal activities.

Among the major violations noted in the FIU’s conclusions are the exchange’s inability to keep thorough transaction records, give authorities the information they needed, and follow guidelines for data retention.

The FIU’s fine against Binance is consistent with other regulatory crackdowns around the world. Binance was fined $4.4 million by Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) for failing to register and failing to disclose major transactions involving digital assets.

Binance is continuing to challenge regulatory claims despite these challenges. Earlier this year, the company faced legal issues in Nigeria when two of its executives were arrested on charges of tax evasion and money laundering, complicating the regulatory landscape.

This penalty signals a turning point in the changing regulatory landscape of cryptocurrency in India, highlighting the increased oversight and enforcement efforts to protect the country’s economy. Businesses operating in this growing sector must comply with AML regulations as global authorities step up their oversight of digital assets.

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