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Finance Ministry imposes Rs 18.82 crore penalty on world’s largest cryptocurrency exchange Binance
Binance has been fined $2.25 million (Rs 18.82 crore) by India’s Financial Intelligence Unit (FIU) for violating the country’s anti-money laundering regulations, Reuters reports. “After reviewing Binance’s written and oral submissions, the Director of the FIU-IND, based on the material available on file, concluded that the accusations against Binance were founded,” the financial watchdog said in a notification.
The notification stated that Binance had to pay a penalty of Rs 18.82 crore and also asked Binance to comply with “Chapter IV of the PMLA 2002, in conjunction with the PMLA Records Maintenance Rules (PMLA Rules) 2005 for the prevention of money laundering activities. 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 crypto exchanges in India to be registered with the FIU as a reporting entity and comply with its anti-money laundering rules. In May, Binance completed the initial registration with the FIU.
Earlier this year, the FIU also blocked nine offshore exchanges in India for failing to register and comply with local anti-money laundering regulations under the Prevention of Money Laundering Act ( PMLA) 2002.
Binance’s rival KuCoin had faced a penalty of less than Rs 34.5 lakh.
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The financial watchdog under the Finance Ministry has also asked the Ministry of Electronics and Information Technology to block online access to stock exchanges.
Binance fined by Canadian government
India is not the only country to fine Binance. In May this year, Canada’s anti-money laundering agency also fined Binance $4.38 million for violating anti-money laundering rules.
U.S. District Judge Richard Jones sentenced Changpeng Zhao, the former chief executive of Binance, to four months in prison in May after he pleaded guilty to violating the country’s anti-money laundering laws.