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India’s Financial Intelligence Unit (FIU) fined Binance, the world’s largest cryptocurrency exchange, approximately $2.2 million for providing services to Indian customers without complying with the country’s anti-money laundering (AML) regulations. The fine was imposed because Binance did not adhere to India’s strict AML regulations.
Background of the $2.2 Million Fine
In January 2024, Indian authorities issued notifications to Binance and several other offshore cryptocurrency exchanges, warning them of illegal operations in the country. As a result of these notifications, these exchanges exited the Indian market. This move was part of the Indian government’s commitment to strictly enforce AML regulations and ensure that all entities operating within the country comply with national laws.
After initially being expelled from the country, Binance, along with KuCoin, managed to obtain conditional approval from the FIU in May 2024. The approval was granted on the condition that Binance agreed to pay the fine and comply with India’s AML regulations in the future. This development was a significant step for Binance to re-enter the Indian market under strict regulatory scrutiny.
The FIU’s decision came after a thorough examination of written and verbal statements provided by Binance. According to the FIU’s statement, the FIU-IND Director confirmed the allegations against Binance based on the existing evidence. Consequently, Binance was fined approximately $2.2 million and was given specific instructions to ensure strict compliance with AML obligations.
Impact of the Fine on Binance and Other Cryptocurrency Exchanges
The $2.2 million fine and the conditions set by the FIU indicate increasing regulatory pressure on cryptocurrency exchanges operating in India.
The Binance case sets a precedent for how Indian regulators will assess the situation of offshore cryptocurrency exchanges in the future. Furthermore, other cryptocurrency exchanges must comply with local laws and regulations to avoid similar fines and legal hurdles.
