Regulation
Fined $2.25 million by FIU due to anti-money laundering regulations
Big trouble for Binance in India!
Binance, the world’s leading blockchain and cryptocurrency platform, has been slapped with a hefty fine of Rs 18.82 crore ($2.25 million) by India’s Financial Intelligence Unit (FIU) for failing to comply with anti-money laundering (AML) regulations. This fine is critical for Binance to resume its operations in the country.
Here’s more on this.
Regulatory repression
The problems for Binance began with a warning in December 2023, which led to its registration with the FIU in May this year. In addition to Binance, eight other offshore exchanges, including KuCoin and Huobi, have come under similar scrutiny for failing to follow local regulations.
According to the director of FIU-India, Binance was found operating in India without meeting the stringent requirements of the Prevention of Money Laundering Act (LPLA). Despite submitting documents during a thorough review, Binance failed to meet important AML guidelines.
Steps towards compliance
To correct these issues and prevent future violations, Binance has received specific guidance to ensure strict adherence to Chapter IV of the PMLA of 2002 and the PMLA Maintenance of Record Rules of 2005. These rules are crucial to preventing money laundering and terrorist financing.
Global regulatory challenges
The fine imposed on Binance is part of a broader effort to bring international exchanges in line with local regulations. Earlier this year, the Indian government took action by blocking the websites of these exchanges and removing their apps from platforms such as Google and Apple.
Binance and KuCoin’s recent registration with the FIU represents a significant milestone, indicating their commitment to meeting India’s stringent AML compliance requirements.
Legal battles around the world
Apart from India, Binance faces regulatory challenges across the world. Earlier this year, former CEO Changpeng Zhao was sentenced to four months in prison in the United States for violating anti-money laundering laws. Additionally, Binance is currently appealing a $4.4 million fine in Canada for failing to register as a foreign money services business and failing to report large virtual currency transactions.
This appeal follows a significant $4.3 billion settlement in the United States for similar violations, which led to Binance exiting the Canadian market last year.
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