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Ministry of Finance imposes fine of Rs 18.82 crore on world’s largest cryptocurrency exchange Binance
Binance was fined $2.25 million (Rs 18.82 crore) by India’s Financial Intelligence Unit (FIU) for violating the country’s anti-money laundering rules, Reuters reports. “After considering Binance’s written and oral representations, the Director, FIU-IND, based on the material available on file, found that the allegations against Binance have merit,” the financial regulator said in a notification.
The notification stated that Binance has to pay a penalty of Rs 18.82 crore and further asked Binance to comply with “Chapter IV of the PMLA 2002, in conjunction with the PMLA Maintenance of Record Rules (PMLA Rules) 2005 for prevention of activities of Money Laundering and Countering the Financing of Terrorism (AMLCFT) to maintain records of all transactions.”
Why did the FIU impose a penalty on Binance?
It is mandatory for virtual digital asset service providers such as cryptocurrency exchanges in India to be registered with the FIU as a reporting entity and comply with its anti-money laundering regulations. Binance completed its initial registration with the FIU in May.
Earlier this year, the FIU also blocked nine offshore exchanges in India for failing to register and follow local anti-money laundering regulations under the Prevention of Money Laundering Act (PMLA) 2002.
Binance rival KuCoin had faced a minor penalty of Rs 34.5 lakh.
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The Financial Supervisory Authority of the Ministry of Finance also asked the Ministry of Electronics and Information Technology to block online access to exchanges.
Binance fined by Canadian government
India is not the only country to impose fines on Binance. In May this year, Canada’s anti-money laundering agency had also imposed a $4.38 million fine on Binance for violating anti-money laundering regulations.
US District Judge Richard Jones sentenced Changpeng Zhao, Binance’s former CEO, to four months in prison in May after pleading guilty to violating the country’s anti-money laundering laws.