Binance Fined $2.2 Million by Indian Regulator

Indian FIU fines Binance $2.2 million for failing to comply with anti-money laundering rules. Binance also faces a $4.4 million penalty in Canada and is appealing the decision. FIU-India mandates Binance to enhance its compliance protocols.

The Indian Financial Intelligence Unit (FIU) has fined Binance, the world’s largest cryptocurrency exchange, INR 188.2 million (around $2.2 million) for non-compliance with anti-money laundering regulations under the Prevention of Money Laundering Act (PMLA) of 2002.

At the same time, Binance is contesting a $4.4 million fine by Canada's financial regulator. The Director of FIU-India found that Binance operated in India without fulfilling legal requirements under the PMLA. This decision followed an in-depth review of Binance’s operations. The FIU has also ordered Binance to improve its compliance protocols in line with PMLA rules, which aim to prevent money laundering and terrorist financing.

This penalty is part of a broader effort to ensure international exchanges comply with local regulations. Recently, Binance and KuCoin were among the first offshore crypto entities registered with FIU-India, marking a significant step in a sector where strict anti-money laundering compliance is essential. This push for registration began in December 2023 when FIU-India issued notices to nine offshore crypto exchanges, including Binance. In response, Apple removed non-compliant platforms from its App Store, and the IT Ministry blocked their websites, encouraging users to move to compliant Indian exchanges.

Meanwhile, in Canada, Binance is appealing a $4.4 million fine from the Financial Transactions and Reports Analysis Centre of Canada (Fintrac). Fintrac claims Binance failed to register as a foreign money services business and did not report large virtual currency transactions. Binance argues that its operations in Canada were minimal and incidental to its global presence.

This Canadian appeal is part of a series of regulatory challenges Binance faces globally. In the US, Binance settled for $4.3 billion over anti-money laundering and sanctions violations. Last year, Binance exited the Canadian market, highlighting its ongoing regulatory difficulties in various regions.

The Indian Financial Intelligence Unit (FIU) has fined Binance $2.2 million for failing to comply with anti-money laundering regulations under the Prevention of Money Laundering Act (PMLA) of 2002. This action requires Binance to enhance its compliance protocols. The decision followed a review of Binance’s operations and found that the exchange was not meeting legal obligations.

Simultaneously, Binance is challenging a $4.4 million penalty in Canada imposed by the Financial Transactions and Reports Analysis Centre of Canada (Fintrac). Fintrac claims Binance failed to register as a foreign money services business and did not report large virtual currency transactions. Binance contends that its Canadian operations were minor and part of its global activities.

This appeal is part of Binance's broader struggle with regulatory issues worldwide. In the US, Binance settled a major case for $4.3 billion over anti-money laundering and sanctions violations. These ongoing legal battles highlight the regulatory challenges Binance faces in multiple jurisdictions.

Recently, Binance and KuCoin were registered as the first offshore crypto entities with the Indian FIU, a significant move in a sector requiring strict anti-money laundering compliance. This registration push began in December 2023, when FIU-India issued notices to nine offshore crypto exchanges, including Binance. In response, Apple removed non-compliant platforms from its App Store, and the IT Ministry blocked their websites, encouraging users to move to compliant Indian exchanges.

Binance's regulatory challenges extend beyond India and Canada. The decision to exit the Canadian market last year underscores its difficulties in meeting diverse regulatory requirements. These issues emphasize the importance of global crypto exchanges adhering to local laws to avoid hefty fines and operational restrictions.

In conclusion, the fines and regulatory challenges Binance faces in India and Canada highlight the increasing global scrutiny on cryptocurrency exchanges. Actions by financial regulators in different countries are part of a broader effort to enforce compliance with anti-money laundering laws and other financial regulations. As Binance navigates these challenges, the outcomes will likely influence its operations and regulatory strategies in other regions.