Binance Hit With $2.25 Million Fine Over Money Laundering

India’s Financial Intelligence Unit (FIU) has slammed a fine of $2.25 million (188.2 million rupees) on the world’s largest cryptocurrency exchange, Binance, for operating in the country without proper registration, as mandated by law.

This penalty was disclosed in a statement from the FIU, which was obtained by Naija News on Thursday.

The Indian authorities stated that Binance violated three sections of the Prevention of Money Laundering Act, 2002, by operating as an unregistered entity within the country.

This development adds to Binance’s ongoing legal issues, as it is also under trial in Nigeria for money laundering and tax evasion.

Recall that in Nigeria, the Economic and Financial Crimes Commission (EFCC) accused Binance of laundering over $35 million through its platform.

Additionally, the Federal Inland Revenue Service (FIRS) has filed a separate case against the exchange for tax evasion.

Binance registered with India’s FIU in May, attempting to resume operations after receiving a show-cause notice from the financial watchdog in December 2023. However, the exchange’s failure to comply with regulations resulted in the substantial fine.

The FIU’s document stated: “1. Binance, by operating as a Virtual Digital Asset Service Provider (VDA SP) under Section 2(sa)(vi) of the Prevention of Money Laundering Act (PMLA), 2002, is considered a reporting entity under Section 2(1)(wa) of the Act.

“2. Due to Binance’s ongoing service provision to Indian clients without fulfilling its statutory obligations under the PMLA, a notice dated December 28, 2023, was issued, compelling Binance to explain why action should not be taken against it for its non-compliance.

“3. After reviewing Binance’s written and oral submissions, the Director of FIU-IND determined that the charges were substantiated. Consequently, on June 19, 2024, the Director imposed a penalty of Rs. 18,82,00,000.”

In Nigeria, Binance shut down its naira-dollar services after the Federal Government accused the platform of manipulating foreign exchange rates, leading to stricter oversight and a crackdown on cryptocurrency trading platforms.