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Synopsis: The Financial Intelligence Unit (FIU) of India has fined Binance, the world's largest cryptocurrency exchange, $2.25 million for violating anti-money laundering regulations. The fine follows Binance's registration with the FIU in May 2024 to resume operations after a show-cause notice in December 2023. Several other offshore exchanges, including KuCoin and Huobi, also faced penalties and operational restrictions.
The Financial Intelligence Unit (FIU) of India has imposed a $2.25 million fine on Binance, the world's largest cryptocurrency exchange, for breaching anti-money laundering regulations. This enforcement action comes after Binance registered with the FIU in May 2024 to reinstate its operations in India, following a show-cause notice issued in December 2023.
The FIU's scrutiny was not limited to Binance alone; eight other offshore exchanges, including KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex, were also cited for violating local rules. In response, the Indian government ordered the blocking of these exchanges' URLs in January 2024, and their apps were subsequently removed from the Google and Apple app stores.
Virtual digital asset service providers in India are required to register with the FIU as ‘reporting entities’ and comply with the Prevention of Money Laundering Act (PMLA), 2002. This regulatory framework aims to prevent financial crimes and ensure the integrity of the financial system.
In March 2024, the FIU lifted its ban on KuCoin after imposing a penalty of Rs 34.5 lakh, highlighting the ongoing regulatory efforts to enforce compliance among cryptocurrency exchanges.
Adding to Binance's challenges, Changpeng Zhao, the former CEO, was sentenced to four months in prison earlier this year after pleading guilty to violating U.S. anti-money laundering laws. This incident underscores the global regulatory pressures faced by major cryptocurrency platforms and the importance of adherence to legal standards in different jurisdictions.
