New Delhi: The Financial Intelligence Unit (FIU) has imposed a fine of Rs 18.82 crore on Binance, the world's largest cryptocurrency exchange, for alleged contravention of the country's anti-money laundering law.
The federal agency issued an order on Thursday accusing the exchange of “dereliction of duty” for being a category of Virtual Digital Asset Service Provider (VDASP) reporting entity under the Prevention of Money Laundering Act (PMLA).
India's anti-money laundering law stipulates that VDASPs must register as a reporting entity with the FIU and share timely reports of suspicious transactions with it, which helps the FIU monitor financial crimes.
The summary order acceded to said Binance was first served notice on December 28, 2023, as it was operating in India and providing services to Indian customers.
Binance had not previously registered as a reporting entity with the FIU, as required by the PMLA. It did so in May this year after the Union government banned its URLs in India and the FIU issued a show cause notice, along with eight other crypto companies, a senior official said.
The crypto exchange has not responded to a query made regarding the sanction order.
"After considering Binance's written and oral submissions, the Director of FIU-IND, based on the material available in the record, concluded that the charges against Binance were substantiated.
“Consequently, the Director FIU-IND vide order dated June 19, 2024, in exercise of powers under Section 13 of the PMLA, imposed a total fine of Rs 18,82,00,000 on Binance…” , the order said.
The exchange has been charged under Section 12(1) of the PMLA, which requires a reporting entity to maintain a record of all transactions and timely provide it to the FIU, along with accompanying regulations stipulated in the anti-trade law. money laundering.
This is the second penalty order issued by the FIU against a cryptocurrency exchange or VDASP as it had issued a penalty notice worth Rs 34.50 lakh against KuCoin for a similar PMLA violation.
The order says that the FIU has also issued "specific instructions" to Binance to "ensure diligent compliance with the obligations described in Chapter IV of the PMLA, in conjunction with the PMLA Recordkeeping Rules (PMLA Rules) of 2005 for the prevention of money laundering activities and the fight against the financing of terrorism".
The sanction order was issued against Binance setup in Seychelles, Cayman Islands, Switzerland and www.binance.com.
A cryptocurrency exchange is a digital marketplace that allows users to buy and sell cryptocurrencies such as Bitcoin, Ethereum, and Tether.
Binance, launched in July 2017, said on its website that it was the largest cryptocurrency exchange by trading volume.
It has also been in the crosshairs of investigation by the Enforcement Directorate (ED), India's other federal agency that implements anti-money laundering law, as it froze funds worth millions of rupees held in this exchange as part of several investigations.
The federal agency issued an order on Thursday accusing the exchange of “dereliction of duty” for being a category of Virtual Digital Asset Service Provider (VDASP) reporting entity under the Prevention of Money Laundering Act (PMLA).
India's anti-money laundering law stipulates that VDASPs must register as a reporting entity with the FIU and share timely reports of suspicious transactions with it, which helps the FIU monitor financial crimes.
The summary order acceded to said Binance was first served notice on December 28, 2023, as it was operating in India and providing services to Indian customers.
Binance had not previously registered as a reporting entity with the FIU, as required by the PMLA. It did so in May this year after the Union government banned its URLs in India and the FIU issued a show cause notice, along with eight other crypto companies, a senior official said.
The crypto exchange has not responded to a query made regarding the sanction order.
"After considering Binance's written and oral submissions, the Director of FIU-IND, based on the material available in the record, concluded that the charges against Binance were substantiated.
“Consequently, the Director FIU-IND vide order dated June 19, 2024, in exercise of powers under Section 13 of the PMLA, imposed a total fine of Rs 18,82,00,000 on Binance…” , the order said.
The exchange has been charged under Section 12(1) of the PMLA, which requires a reporting entity to maintain a record of all transactions and timely provide it to the FIU, along with accompanying regulations stipulated in the anti-trade law. money laundering.
This is the second penalty order issued by the FIU against a cryptocurrency exchange or VDASP as it had issued a penalty notice worth Rs 34.50 lakh against KuCoin for a similar PMLA violation.
The order says that the FIU has also issued "specific instructions" to Binance to "ensure diligent compliance with the obligations described in Chapter IV of the PMLA, in conjunction with the PMLA Recordkeeping Rules (PMLA Rules) of 2005 for the prevention of money laundering activities and the fight against the financing of terrorism".
The sanction order was issued against Binance setup in Seychelles, Cayman Islands, Switzerland and www.binance.com.
A cryptocurrency exchange is a digital marketplace that allows users to buy and sell cryptocurrencies such as Bitcoin, Ethereum, and Tether.
Binance, launched in July 2017, said on its website that it was the largest cryptocurrency exchange by trading volume.
It has also been in the crosshairs of investigation by the Enforcement Directorate (ED), India's other federal agency that implements anti-money laundering law, as it froze funds worth millions of rupees held in this exchange as part of several investigations.
