Binance, one of the world’s leading cryptocurrency exchanges, was recently fined roughly $ 2.25 million or Rs. 18.82 crores by India’s Financial Intelligence Unit [FIU]. The order, dated June 19, 2024, cited multiple violations of the Prevention of Money Laundering Act [PMLA], 2002, as a Virtual Digital Asset Service Provider. The financial watchdog alleged that the crypto exchange failed to comply with its statutory obligations under the PMLA while serving Indian clients and maintaining operations within India.
Last year, FIU issued a notice to Binance, demanding an explanation for its non-compliance. The trading platform was required to justify why no action should be taken against it for neglecting its responsibilities under the Act. Following a thorough review of Binance’s written and oral submissions, the Director of FIU-IND determined that the charges were substantiated.
The development came after three months when the platform and nine other offshore cryptocurrency platforms were banned from operating in India in response to the platforms’ failure to comply with FIU and PMLA guidelines. Before that action, Binance enjoyed a share of 90% of the estimated $4 billion crypto holdings of Indian nationals.
Despite the penalties, the exchange has made its intention clear of its comeback. However, its re-entry will involve meeting new conditions, including registration with the Treasury Department’s Financial Intelligence Unit and adherence to relevant laws like the Prevention of Money Laundering Act and the VDA tax framework.
Binance’s Plans to Re-enter India Unveiled
Previously, Seychelles-based crypto exchange Kucoin, which had registered with the FIU in March, was fined $3.45 million. After becoming FIU compliant, the ban was lifted. This move positioned Kucoin as the second offshore exchange to register under the FIU and PMLA regulations officially.
“With KuCoin and now Binance, it seems like foreign exchanges are not ready to miss the Indian crypto market,” wrote one user.
Furthermore, Binance has revealed that it is planning to provide localized payment solutions, establish a dedicated team in India, and make further investments in the country’s blockchain infrastructure.
