India’s Financial Intelligence Unit has imposed a fine of $2.25m (188.2 million rupees) on Binance, the world’s largest cryptocurrency exchange, for operating in the country without registering with the agency, as required by law.
The FIU made this disclosure in a statement obtained by The PUNCH from its website on Thursday.
The Indian Authority said Binance, as a registered entity in the country, violated three sections of the country’s Prevention of Money Laundering Act, 2002.
This is the latest trouble for the exchange, which is already facing a trial in Nigeria for money laundering and tax evasion charges.
In Nigeria, the Economic and Financial Crimes Commission accused Binance of laundering over $35m through its platform.
The exchange is also facing a separate case of tax evasion filed by the Federal Inland Revenue Service.
Binance had registered with the FIU in May, seeking to resume operations in India after being issued a show-cause notice by the financial watchdog in December 2023.
However, the exchange failed to comply with the regulations, leading to a hefty fine.
Part of the document read: “1. Binance, by virtue of operating as a Virtual Digital Asset Service Provider (VDA SP) carrying on designated business or profession as other activities under Section 2(sa)(vi) of the Prevention of Money Laundering Act (PMLA), 2002 (hereinafter referred to as ‘the Act’), is a reporting entity in terms of Section 2(1) (wa) of the Act.
“2. Consequently, due to Binance’s ongoing provision of services to Indian clients and operations within India without adhering to its statutory obligations under the PMLA, a notice dated December 28, 2023, was issued to Binance pursuant to Section 13 of the Act, compelling Binance to demonstrate why appropriate action should not be undertaken against it for its dereliction of duties under the Act, despite its status as a reporting entity owing to its operations as a Virtual Digital Asset Service Provider.
“3. 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.
“Consequently, the Director FIU-IND, vide order dated June 19, 2024, in the exercise of powers under Section 13 PMLA, imposed a total penalty of Rs. 18,82,00,000,” the FIU stated.
The crypto exchange platform shut down naira-dollar services after the Federal Government accused it of manipulating foreign exchange rates.
This led to a serious crackdown and stricter oversight of crypto trading platforms operating in the country.
On February 28, Nigerian authorities detained two senior executives from Binance, a cryptocurrency exchange platform.
The executives, Nadeem Anjarwalla and Tigran Gambaryan, were taken into custody following a meeting in Nigeria, despite the government’s recent ban on cryptocurrency channels.
The ban is part of a broader effort to address currency speculation.
Although the Federal High Court recently dismissed tax evasion charges against the executives, the Federal Inland Revenue Service has filed amended charges, naming Binance as the sole defendant.
