Hyderabad: The Financial Intelligence Unit (FIU) under the Ministry of Finance Thursday imposed a fine of Rs 18.82 crore on cryptocurrency exchange Binance for violating India’'s anti-money laundering law – the Prevention of Money Laundering Act of 2002. The company founded by Changpeng Zhao operates the world’s largest exchange for Crypto currencies by volume.
In December last year, the Financial Intelligence Unit (FIU-IND) issued a notice to Binance for offering services to its customers and clients in India without adhering to the country's statutory framework.
In a statement issued on Thursday (June 20), the FIU said Binance by virtue of operating as a Virtual Digital Asset Service Provider (VDA-SP), carrying on designated business or profession as other activities under Section 2(sa)(vi) of the Prevention of Money Laundering Act (PMLA), 2002 is a Reporting Entity under the law.
It said that 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 under Section 13 of the Act.
The notice required 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).
In response to the FIU's notice of December last year, the company made representations before Indian authorities. However, it failed to cut the ice with India's financial intelligence regulator.
