Global cryptocurrency exchange Binance has been hit with a $2.25 million fine by India’s Financial Intelligence Unit (FIU) for allegedly violating the country’s Prevention of Money Laundering Act (PMLA).
According to the order filed this week, the fine is the result of “Binance’s ongoing provision of services to Indian clients and operations within India without adhering to its statutory obligations under the PMLA”.
Binance was among nine cryptocurrency websites barred by the Indian government in January for operating without proper compliance to local financial regulations. Around the same time, it was also announced that Binance CEO and founder, Changpeng Zhao, was to step down from his position after the exchange pleaded guilty to US federal charges relating to anti-money laundering (AML), unlicensed money transmitting and sanctions violations.
Despite these setbacks, Binance soon sought to relevel its operations in India by registering as a Virtual Digital Asset Service Provider (VDASP) with the FIU in May.
However, it appears as though the exchange as yet again fallen short of the standards set by India’s financial watchdog, which writes that “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”.
Going forward, the exchange has been given specific directions to shore up its AML processes, including an order to “ensure diligent compliance” with the PMLA and its record keeping requirements for the prevention of terrorist financing.
Speaking to FinTech Futures, a Binance spokesperson says: “We are aware of the FIU’s order and are reviewing it now to determine next steps.
“We wish to work with the FIU as a reporting entity and we are enthusiastic about reentering the Indian market to contribute positively, should we be able to do so in the near future. We remain dedicated to maintaining transparency, fostering cooperation, and ensuring compliance with regulatory authorities.”
