Binance, a leading cryptocurrency exchange, has been fined 188.2 million rupees ($2.25 million) by India’s Financial Intelligence Unit (FIU) for violating the country’s anti-money laundering laws.
This development adds to the firm’s ongoing legal troubles, including a court trial in Nigeria.
In India, virtual digital asset service providers, including crypto exchanges, must register with the FIU and comply with anti-money laundering regulations.
Despite Binance’s efforts to resume operations by registering with the FIU in May 2024, the firm was found to have breached several sections of the Prevention of Money Laundering Act (PMLA), 2002.
A document titled “Order in Original No. 10/DIR/FIU-IND/2024 in the Matter of Binance u/s Section 13 dated 19.06.2024,” obtained by Channels Television on Thursday, revealed the reasons behind the penalty.
The FIU stated, “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 (VDA SP).”
The FIU’s Director found the charges against Binance substantiated after reviewing the firm’s written and oral submissions.
Consequently, the Director imposed a total penalty of Rs. 18,82,00,000 (approximately $2.25 million) on June 19, 2024.
Meanwhile, in Nigeria, Binance faces multiple legal challenges.
The Federal Inland Revenue Service (FIRS) has accused the company of tax evasion, while the Economic and Financial Crimes Commission (EFCC) has alleged that Binance laundered more than $35 million through its platform.
Additionally, the Nigerian government has accused the exchange of influencing foreign exchange rates, leading to stricter oversight of crypto trading platforms.
The legal troubles for Binance in Nigeria intensified on February 28, 2024, when authorities detained two senior Binance executives: Nadeem Anjarwalla, a British-Kenyan regional manager for Africa, and Tigran Gambaryan, an American head of financial crime compliance.
Their detention followed a federal government ban on cryptocurrency channels aimed at curbing currency speculation.
Although the Federal High Court recently discharged Gambaryan and Anjarwalla from the FIRS tax evasion case, the FIRS has filed amended charges with Binance as the sole defendant.
