Binance, a prominent cryptocurrency exchange, has been slapped with a hefty $2.25 million fine in India for operating in the country without adhering to local anti-money laundering regulations. The Financial Intelligence Unit (FIU) of India imposed the penalty on Binance after the exchange failed to register with the FIU and comply with its anti-money laundering (AML) rules.
In an official statement released on June 19th, the regulator revealed that it had imposed a total fine of 188.2 million rupees (equivalent to approximately $2.25 million) on Binance for violating various AML rules and directives aimed at combating terrorism financing. As of now, Binance has not made any public statements regarding the matter.
India has emerged as one of the fastest-growing cryptocurrency economies, boasting the highest adoption rate as of 2023, according to a report by Chainalysis. Back in mid-April, Binance had agreed to pay an additional $2 million penalty after being subjected to a four-month ban imposed by the FIU.
Before the ban was implemented in January, Binance reportedly held sway over more than 90% of the crypto trading volume in India. The exchange’s popularity surged as traders sought to evade the tax implications imposed by the Indian government.
In March, India’s Ministry of Finance mandated that all crypto businesses must register with the FIU and comply with the provisions of the Prevention of Money Laundering Act (PMLA). By December 2023, a total of 28 cryptocurrency firms had already registered with the national AML agency, as reported by crypto.news.
The regulation of cryptocurrencies remains a contentious issue in India, with regulators divided on how to approach this emerging industry. While India’s Minister of Finance, Nirmala Sitharaman, has called for international collaboration in building a comprehensive crypto framework and urged governments to consider the merits of blockchain technology, the Reserve Bank of India has maintained its stance on crypto and advocated for a blanket ban on digital assets.
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