India’s financial regulator hits crypto exchange Binance with $2.25m fine

Binance was fined $2.25 million in India for operating in violation of local anti-money laundering rules.

India’s Financial Intelligence Unit (FIU) has imposed a multi-million fine on Binance for the cryptocurrency exchange’s failure to register with the Financial Intelligence Unit to comply with anti-money laundering (AML) rules.

The regulator said in an official statement on June 19 that it had imposed fines totaling 188.2 million rupees (about $2.25 million) for breaches of multiple AML rules and directives focused on combating the financing of terrorism. As of press time, Binance has not made any public statement on the matter.

According to the Chainalytics report, India is one of the fastest growing crypto economies with the highest adoption rate by 2023. In mid-April, crypto.news reported that Binance had agreed to pay another $2 million in fines following the four-month ban. It was placed on the stock market by the Financial Intelligence Unit.

Before the January ban, Binance reportedly dominated over 90% of crypto trading volume in India. The exchange’s popularity soared as traders tried to circumvent taxation imposed by the Indian government.

In March, India’s Ministry of Finance made it mandatory for all crypto businesses to register with the Financial Intelligence Unit and comply with the provisions of the PMLA. As reported by Crypto.news, as of December 2023, 28 cryptocurrency firms had registered with the national AML agency.

Cryptocurrency remains a controversial issue in India, where regulators are divided on how to approach the emerging sector. Indian Finance Minister Nirmala Sitharaman called for international cooperation to create a comprehensive crypto framework and urged governments to consider the benefits of blockchain. However, the Reserve Bank of India did not change its stance on crypto and advocated a blanket ban on digital assets.