The world’s largest crypto exchange, Binance, has been hit with a fine of 188.2 million rupees ($2.25 million) by India’s Financial Intelligence Unit (FIU) for violating its money laundering law.
This comes amid an ongoing trial of the exchange’s officials in Nigeria for the same charges.
Aside from the case of tax evasion filed by the Federal Inland Revenue Service (FIRS), the Economic and Financial Crimes Commission (EFCC) accused Binance of laundering more than $35 million through its platform.
In India, virtual digital asset service providers like crypto exchanges are required to be registered with the FIU as a reporting entity and comply with its anti-money laundering rules.
In May, Binance had registered with the FIU as the exchange sought to resume operations in the country after the watchdog issued show-cause notices to nine offshore exchanges operating in violation of local rules.
The violations
However, the Indian Authority said Binance as a registered entity in the country has violated three sections of the country’s Prevention of Money Laundering Act (PMLA), 2002.
“Due to Binance’s ongoing provision of services to Indian clients and operations within India without adhering to its statutory obligations under the PMLA a Notice dated December 28, 2023, was issued to Binance pursuant to Section 13 of the Act, compelling Binance to demonstrate why appropriate action should not be undertaken against it for its dereliction of duties under the Act, despite its status as a Reporting Entity owing to its operations as a Virtual Digital Asset Service Provider (VDA SP).
“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.
Consequently, the Director FIU-IND vide order dated 19th June 2024 in the exercise of powers under Section 13 PMLA, imposed a total penalty of Rs. 18,82,00,000,” the FIU stated.
Binance’s trial in Nigeria
The Nigerian government recently accused the cryptocurrency exchange of influencing foreign exchange (FX) rates, leading to stricter oversight of crypto trading platforms.
- On February 28, Nigerian authorities detained two senior Binance executives: Nadeem Anjarwalla, a 37-year-old British-Kenyan who serves as the regional manager for Africa, and Tigran Gambaryan, a 39-year-old American who is the head of financial crime compliance at Binance.
- Following the federal government’s ban on cryptocurrency channels as part of a campaign against currency speculation, the Binance executives visited Nigeria for a meeting.
- Although the Federal High Court last week discharged Gambaryan and fleeing Anjarwalla from the Federal Inland Revenue Service (FIRS) tax evasion case against the cryptocurrency exchange platform, Binance, the FIRS has filed amendment charges against them with Binance as the sole defendant.
- Meanwhile, the EFCC is separately prosecuting Binance and its executives over alleged money laundering and foreign exchange contravention.