The Financial Intelligence Unit (FIU) has levied a substantial penalty of Rs 18.82 crore ($2.25 million) on Binance, the world’s largest cryptocurrency exchange, for breaching anti-money laundering (AML) regulations.
This enforcement action comes a month after the FIU granted Binance registration approval in India. The money laundering watchdog had earlier issued show-cause notices to nine offshore exchanges, including Binance, for regulatory violations.
In December 2023, Binance received notices for offering services to Indian clients and conducting operations in India without complying with statutory obligations under Section 13 of the Prevention of Money Laundering Act (PMLA), according to an FIU press release.
In addition to Binance, KuCoin, another crypto exchange, received FIU approval in May this year, conditional upon a penalty post-hearing with the regulator. KuCoin was penalized Rs 34.5 lakhs for similar violations.
This incident follows a $4.4 million penalty imposed on Binance by Canada’s financial watchdog in May for breaches of money laundering and terrorist financing laws.
Commenting on the development, Shivam Thakral, CEO of BuyUcoin, stated, “This significant penalty is a clear indication of the increasing scrutiny and regulation in the digital asset space. I believe that the regulations are becoming more organized for cryptocurrency exchanges. Sustained efforts by FIU-IND will create a fertile ground for Web3 businesses to grow and enable India to become a $1 trillion digital economy.”
The increasing regulatory scrutiny underscores the need for crypto exchanges to adhere strictly to AML regulations, ensuring a more secure and transparent digital asset ecosystem.
