India’s Financial Intelligence Unit (FIU) has imposed a fine of 188.2 million rupees ($2.25 million) on Binance, the world’s largest crypto exchange, for operating in the country in violation of local anti-money laundering regulations.
The FIU’s action comes amidst ongoing legal battles for similar charges in Nigeria, including allegations of tax evasion by the Federal Inland Revenue Service (FIRS).
In India, virtual digital asset service providers such as crypto exchanges must register with the FIU as reporting entities and comply with stringent anti-money laundering laws. Binance had registered with the FIU in May to resume operations in compliance after the watchdog issued show-cause notices to nine offshore exchanges breaching local rules.
However, despite its registration, Binance allegedly violated three sections of India’s Prevention of Money Laundering Act (PMLA) 2002. The FIU issued a notice on December 28, 2023, requiring Binance to explain its non-compliance despite being a registered entity.
“After reviewing Binance’s submissions, the Director of FIU-IND found the charges substantiated based on available evidence,” stated the FIU. Consequently, on June 19, 2024, the FIU imposed a penalty of Rs. 18,82,00,000 under Section 13 of the PMLA.
Meanwhile, in Nigeria, authorities have accused Binance of influencing foreign exchange rates, leading to increased scrutiny of crypto trading platforms. Earlier in the year, two senior Binance executives were detained over tax evasion allegations by the FIRS. Although one executive was discharged recently, the FIRS has amended charges against them with Binance as the sole defendant.
Separately, the Economic and Financial Crimes Commission (EFCC) is prosecuting Binance and its executives for alleged money laundering and foreign exchange contraventions in Nigeria.
These legal challenges highlight growing regulatory pressures on global crypto exchanges, signaling heightened oversight in major markets like India and Nigeria.
