Binance has been hit with a fine of 188.2 million rupees ($2.25 million) by India’s Financial Intelligence Unit (FIU) as the crypto exchange firm battles for its reputation in an ongoing court trial in Nigeria.
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.
A document titled ‘Order in original No. 10/DIR/FIU-IND/2024 in the matter of Binance u/s Section 13 dated 19.06.2024’, obtained by Channels Television on Thursday, India’s Financial Intelligence Unit (FIU) said the fine was for violating its money laundering law.
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.
“Consequently, 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),” India’s FIU said.
“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 (Rupees Eighteen Crore Eighty Two Lakh Only) on the Binance with reference to the following violations committed by the Binance: Contravention of Section 12(1), PMLA rw Rules 7(1), PML Rules (i) Contravention of Section 12(1), PMLA rw Rules 3(1)(D) and 7(3), PML Rules () Contravention of Section 12(1), PMLA r’w Rule 8(2) PML Rules
“Furthermore, 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, 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).”
This is as Nigeria’s Federal Inland Revenue Service (FIRS), has filed a case of tax evasion against the company.
The Economic and Financial Crimes Commission (EFCC) has also accused it of laundering more than $35m through its platform.
The Federal Government recently accused the cryptocurrency exchange of influencing foreign exchange (FX) rates, leading to stricter oversight of crypto trading platforms.
In February, it 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 and 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 Binance, the FIRS has filed amendment charges against them with Binance as the sole defendant.
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.
