The Financial Intelligence Unit (FIU) fined Binance, the world’s largest cryptocurrency exchange, Rs 18.82 crore on Wednesday (19 June, 2024) for violating India’s anti-money laundering laws.
This follows the crypto exchange’s reported plan to re-enter Indian markets and blocking of nine offshore exchanges in India several months ago for failing to register and comply with local anti-money laundering regulations under the Prevention of Money Laundering Act (PMLA) 2002.
In a notification, FIU said, “After considering the written and oral submissions of the Binance, Director, FIU-IND, based on the material available on record, found that the charges against Binance were substantiated.”
It also mentioned that Binance has to pay a penalty of Rs. 18.82 Crore for the violations committed by them.
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“Furthermore, specific directions have also been issued to Binance to ensure dligent compliance with the obligations outlined in Chapter IV of the Prevention of Money Laundering Act (PMLA) of 2002, in conjunction with the PMLA Maintenance of Record Rules (PMLA Rules) of 2005 for prevention of money laundering activities and combating the financing of terrorism (AMLCFT)”, said FIU.
In May, Canada’s anti-money laundering authority fined Binance $4.38 million for breaking anti-money laundering regulations. Changpeng Zhao, Binance’s former CEO, received a four-month prison sentence for similar violations in the US.
Binance coming back to India will bring mixed feelings to local crypto exchanges. They’ve seen less trading lately because of unclear rules, ups and downs in token values, and high taxes – like a 30 percent tax on crypto profits and a 1 percent TDS on transactions over Rs 10,000.
Also Read: Cryptocurrency exchanges in India are not allowing all withdrawals amid market surge. Here’s why
As a result, individual users or small investors have been shifting to international exchanges not registered locally to avoid taxes. Binance has been the biggest gainer from this trend, attracting more users.
However, with local registration, exchanges like Binance and KuCoin will also come under Indian regulations, meaning investors will face higher tax burdens.
Disclaimer: Investing in cryptocurrencies or crypto tokens are extremely risky. The above content is for informational purposes only. Please consult a SEBI-registered investment advisor before making any investment decision.
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