Financial watchdog penalizes Binance with Rs 18.82 crore fine

New Delhi: The largest cryptocurrency exchange in the world, Binance, has been fined Rs 18.82 crore by the Financial Intelligence Unit (FIU) for operating in India against local anti-money laundering laws. 

After receiving a show-cause notice from the financial watchdog in December 2023, Binance and eight other offshore exchanges that were operating outside local regulations registered with the FIU in May in an attempt to restore operations in the nation. The notification read: "After considering the written and oral submissions of Binance, the Director, FIU-IND, based on the material available on record, found that the charges against Binance were substantiated."

"Furthermore, specific directions have also been issued to Binance to ensure diligent compliance with the obligations outlined in Chapter IV of the Prevention of Money Laundering Act (PMLA) of 2002, in conjunction with the PMLA Maintenance of Record Rules (PMLA Rules) of 2005 for the prevention of money laundering activities and combating the financing of terrorism (AMLCFT)," said the statement. 

In December, as part of the financial watchdog's campaign against offshore cryptocurrency exchanges operating in India without proper registration, Binance was prohibited from conducting business in the nation for violating local legislation.

Virtual digital asset service providers, such as cryptocurrency exchanges, must register with the Federal Bureau of Investigation (FBI) and adhere to the anti-money laundering regulations of the nation.

Virtual digital asset service providers, such as cryptocurrency exchanges, must register with the Federal Bureau of Investigation (FBI) and adhere to the anti-money laundering regulations of the nation. Although Binance has registered with the FBI, it must pay a fine for prior non-compliance before it can start operating again. The current fix is set at Rs 18.82 crore. 

Nine offshore bitcoin exchanges received show-cause notices from the FIU in December 2023 for breaking local laws. It requested that the Ministry of Electronics and Information Technology disable the exchanges' online access.