Binance has been fined $2.25 million by India’s Financial Intelligence Unit (FIU) as the crypto exchange continues to face legal battles in Nigeria. In May, Binance registered with the FIU, seeking to start operations after the unit issued show-cause notices to nine offshore exchanges violating local rules.
FIU imposed the fine for violating India’s money laundering laws. The authority stated that Binance, as a registered entity, breached three sections of the country’s Prevention of Money Laundering Act (PMLA), 2002.
Due to Binance’s ongoing 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. This compelled Binance to demonstrate why action should not be taken against it for dereliction of duties under the Act, despite its status as a Virtual Digital Asset Service Provider (VDA SP).
The FIU explained that after reviewing Binance’s written and oral submissions, it found the charges against the crypto exchange substantiated. Consequently, the Director of FIU-IND, in an order dated June 19, 2024, imposed a penalty of 18,82,00,000 Rupees on Binance. Specific directions were also issued to ensure Binance’s compliance with the obligations outlined in Chapter IV of the PMLA and the PMLA Maintenance of Record Rules of 2005 to prevent money laundering and combat the financing of terrorism.
Meanwhile, Nigeria’s Federal Inland Revenue Service (FIRS) has filed a case of tax evasion against Binance. The Economic and Financial Crimes Commission (EFCC) also accused Binance of laundering more than $35 million through its platform.
Recently, Nigeria’s Federal Government accused Binance of influencing foreign exchange (FX) rates, leading to stricter oversight of crypto trading platforms. In February, two senior executives from Binance, Nadeem Anjarwalla and Tigran Gambaryan, were detained by the Federal Government. Although the Federal High Court last week discharged Gambaryan and Anjarwalla from the FIRS tax evasion case, FIRS has filed amended charges with Binance as the sole defendant.
Binance’s legal troubles highlight the growing regulatory scrutiny of crypto exchanges worldwide. The firm’s challenges in India and Nigeria underscore the need for strict adherence to local laws and regulations as countries tighten controls over the rapidly evolving cryptocurrency market.
The fine in India and the ongoing trial in Nigeria could have significant implications for Binance’s operations and its efforts to expand in these markets. As the company navigates these legal challenges, the broader crypto industry will be closely watching the outcomes and the precedents they may set for regulatory compliance.
Overall, these developments reflect the increasing efforts by governments to regulate the cryptocurrency sector and ensure compliance with financial laws to prevent illegal activities such as money laundering and tax evasion. For Binance, the path forward will likely involve enhanced measures to comply with local regulations and address the concerns raised by regulatory authorities in different jurisdictions.
Source: The Guardian
