FIU Slaps Rs 18.82 Crore Penalty on Crypto Exchange Binance

The federal agency issued an order Thursday charging the exchange with "dereliction of duty" as a reporting entity, with its operations that of a Virtual Digital Asset Service Provider, under the Prevention of Money Laundering Act (PMLA).
Binance
Binance

The Financial Intelligence Unit has slapped a penalty of Rs 18.82 crore on one of the world's largest crypto exchange Binance for alleged contravention of the country's anti-money laundering law.

The federal agency issued an order Thursday charging the exchange with "dereliction of duty" as a reporting entity, with its operations that of a Virtual Digital Asset Service Provider, under the Prevention of Money Laundering Act (PMLA).

The summary order accessed by PTI said Binance was first issued a notice in December last year since it operated in India and provided services to Indian clients.

Binance had not registered as a reporting entity with FIU, as required under the PMLA. It did it in May this year after the Union government banned its URLs in India and was issued a notice, along with eight other crypto firms, by the the FIU, a senior officer said. The exchange has not commented on the penalty order yet.

"After considering the written and oral submissions of Binance, the Director, FIU-IND, based on the material available on record, found that the charges against Binance were substantiated.

"Consequently, the Director FIU-IND vide order dated 19th June, 2024 in exercise of powers under Section 13 PMLA, imposed a total penalty of Rs. 18,82,00,000 on Binance...," the order said.

The exchange has been charged under Section 12 (1) of the PMLA which mandates a reporting entity to maintain a record of all transactions and timely furnish it to the FIU.

The order said the FIU has also issued "specific directions" to Binance for "ensuring diligent compliance with the obligations outlined in Chapter IV of the PMLA, 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."

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