FIU imposes $2.25 million penalty on foreign crypto exchange Binance

Fine on Binance: The Financial Intelligence Unit (FIU) has imposed a fine of Rs 18.82 crore ($2.25 million) on Binance, the world's largest cryptocurrency exchange, for violating local anti-money laundering regulations while operating in India.

In May, Binance registered with the FIU in an attempt to resume its operations in the country. This registration followed a show-cause notice issued by the financial watchdog in December 2023, which also targeted eight other offshore exchanges for non-compliance with local rules.

Binance, founded in 2017 by Changpeng Zhao, is the world's largest cryptocurrency exchange by trading volume. Headquartered in Malta, Binance offers a range of digital asset trading services, including spot and derivatives trading, staking, and lending. 

The recent notification stated, “After considering the written and oral submissions of Binance, the Director of FIU-IND, based on the available evidence, found that the charges against Binance were substantiated.”

The Financial Intelligence Unit (FIU) had directed the Ministry of Electronics and Information Technology to block online access to non-compliant cryptocurrency exchanges.

In contrast, Binance's competitor KuCoin successfully registered and became operational after paying a penalty fee of Rs 34.5 lakh. 

In May, Canada’s anti-money laundering agency fined Binance $4.38 million for violating anti-money laundering regulations.

Additionally, Changpeng Zhao, Binance's former CEO, was sentenced to four months in prison in May by US District Judge Richard Jones in Seattle after pleading guilty to money laundering charges.