Renowned crypto exchange Binance has been fined the sum of $2.25 million in India by the Financial Intelligence Unit (FIU).
The financial watchdog announced that crypto exchange was not adhering to the Prevention of Money Laundering Act, 2002 (PMLA) which is mandated for crypto firms to comply with to keep their operations running in the country.
FIU’s statement reads,
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“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”.
FIU further explained that after considering the written and oral submissions of Binance, Director FIU-IND, based on the material available on record, found that the charges against Binance were substantiated.
It added that specific directions have also been issued to Binance to ensure diligent compliance with the obligations outlined in Chapter IV of the Prevention of Money Laundering Act (PMLA) of 2002, which is in conjunction with the PMLA Maintenance of Record Rules (PMLA Rules) of 2005 for the prevention of money laundering activities and combating the financing of terrorism (AMLCFT).
The US crypto exchange has been mandated to ensure that it diligently complies with India’s PMLA act as soon as possible, however, Binance is yet to respond.
Binance anti-money laundering case in India is coming as the crypto exchange also faces a similar case in Nigeria after the Economic and Financial Crimes Commission formally charged Tigran Gambaryan and Nadeem Anjarwalla, two top officials of Binance with five counts of money laundering of over $35.4 million.
Furthermore, in a lawsuit, the federal government of Nigeria charged the crypto exchange to court for not registering for tax purposes with the FIRS and violating the country’s tax laws.
Although the Federal High Court last week discharged Gambaryan and fleeing Anjarwalla from the FIRS tax evasion case against Binance, the FIRS has filed amendment charges against them with Binance as the sole defendant.
The EFCC continued with its money laundering charges against the crypto platform, and its executive, Tigran Gambaryan, drawing reactions from the latter’s wife, Yukk. This is coming days after Nairametrics reported that the court had last Friday discharged Gambaryan, a 39-year-old American, and fleeing Nadeem Anjarwalla from the Federal Inland Revenue Service (FIRS) tax evasion case against Binance.
The court made the decision in a short ruling following fresh amended charges filed by the FIRS, a federal government agency, which was given a notice from Binance about its appointment of a Nigerian representative by the name of Ayodele Omotilewa.
Binance’s ongoing legal issues in India and Nigeria serve as a reminder of the complex regulatory landscape that cryptocurrency exchanges must navigate. The outcomes of these cases could have far-reaching implications for the exchange and the broader cryptocurrency market.
As the situation develops, Binance will need to enhance its compliance measures and work closely with regulators to address concerns and align with local laws. This approach will be crucial in ensuring its sustained operations and maintaining trust among its global user base.