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Binance faces $2.2 million fine from India’s financial regulator for anti-money laundering violations
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According to an order dated June 19, 2024, the Indian Financial Intelligence Unit (FIU) fined Binance 188.2 million rupees ($2.25 million) for violating India’s Prevention of Money Laundering Act (PLMA ) while operating within its jurisdiction.
This was noted in particular by the FIU Binance failed to comply with various PMLA regulations, including maintaining adequate records of financial transactions, adhering to suspicious activity reporting requirements, and implementing measures to prevent money laundering.
As a virtual digital asset service provider, Binance is recognized as a reporting entity under the PMLA, which requires maintaining and reporting transaction records and implementing stringent AML measures.
However, FIU-IND’s investigation found that Binance did not meet these requirements. In January this year, Indian authorities issued demonstration notices to Binance and several other offshore cryptocurrency exchanges, ultimately leading to their exit from the Indian market for unauthorized operations.
Last month, Binance, together with KuCoin, received conditional approval from the FIU. This approval was granted on the condition that Binance pay a fine after a hearing with the FIU.
The FIU also outlined in the order that it issued specific guidance to Binance to ensure future compliance with PMLA and related recordkeeping regulations.
Binance has not yet released a public statement regarding the fine. The latest news comes amid a growing trend of regulatory scrutiny on cryptocurrency exchanges in India.
Binance’s regulatory problems extend beyond India. Last month, the Financial Transaction and Reporting Analysis Center of Canada (FINTRAC) also imposed a fine of $4.4 million on Binance for failing to register as a foreign money services firm and for failing to reported large digital currency transactions. Binance has disputed these allegations.
Meanwhile, the American arm of Binance, Binance.US, has faced increasing challenges from state authorities in the United States. Numerous states, including North Dakota, North Carolina, Alaska, Florida, Maine and Oregon, have revoked or refused to renew the exchange’s money transfer licenses due to compliance issues and legal complications.
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