India's FIU Fines Binance $2.2 Million

India’s Financial Intelligence Unit (FIU-IND) investigation revealed Binance failed to maintain transaction records and implement robust AML measures.

India's FIU Fines Binance $2.2 Million

India’s Financial Intelligence Unit (FIU-IND) has imposed a fine of 188.2 million rupees ($2.25 million) on the crypto exchange Binance for providing services to Indian clients without complying with the nation’s Anti-Money Laundering rules.

On Thursday, June 19, India's Anti-Money Laundering unit announced that this penalty covers multiple violations of the Prevention of Money Laundering Act (PMLA), 2002.

As a Virtual Digital Asset Service Provider, Binance is classified as a reporting entity (RE) under Section 2(sa)(vi) of the PMLA. This classification requires Binance to maintain and report transaction records and ensure robust Anti-Money Laundering (AML) measures.

However, an investigation by FIU-IND revealed that Binance failed to meet these obligations while serving Indian clients. In January 2024, Indian authorities issued show-cause notices to Binance and several other offshore cryptocurrency exchanges, removing them from India for “operating illegally.”

In May, Binance, along with KuCoin, became one of the first offshore crypto-related entities to be approved by India’s Financial Intelligence Unit (FIU). This approval was conditional upon paying a penalty after a hearing with the FIU.

The FIU announcement noted that, after reviewing the written and oral submissions from the Binance Director and the material available on record, the charges against Binance were found to be substantiated. The fine against Binance cites multiple violations, including failing to maintain and report transaction records, not furnishing required information to authorities, and not preserving records as required by law.

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