The Indian Financial Intelligence Unit fines Binance $2.25 million

The Financial Regulatory Authority of India issued charges against Binance after reviewing written and oral submissions made by a Binance director and available company records.

Details of the case

Binance operates as a service provider for virtual digital assets, which qualifies it as a responsible entity (RE) under the Anti-Money Laundering Act. This classification requires maintaining and reporting transaction records, in addition to ensuring that strong anti-money laundering measures are in place.

However, the FIU investigation revealed that Binance failed to adhere to these requirements when providing services to Indian clients. The Indian authorities issued notices to Binance and several other offshore cryptocurrency exchanges, banning them from operating in India for “operating illegally,” in January 2024.

In May, Binance and Cocoin became the first offshore crypto-related entities to be approved by the Financial Intelligence Unit. The approval was conditional on paying a fine, after a hearing with the Financial Investigations Unit.

Regulatory violations and procedures

Although Binance is permitted to operate in India, the FIU announcement noted that based on materials available on record,