Regulatory Troubles Continue for Binance
The Indian Financial Intelligence Unit (FIU) has imposed a hefty $2.2 million fine on Binance for non-compliance with anti-money laundering regulations, signaling India’s crackdown on virtual digital asset service providers (VDASPs) under the Prevention of Money Laundering Act (PMLA) of 2002. In a similar vein, Binance is also contesting a $6 million penalty levied by Canada’s financial regulator.
The Indian Penalty
- The Director of FIU-India found that Binance had operated in India without fulfilling its legal obligations under the PMLA.
- This decision came after a thorough review of Binance’s submissions.
- The order mandates Binance to revamp its compliance procedures in accordance with the PMLA and its 2005 rules, aimed at combating money laundering and terrorist funding.
Global Compliance and Registration
- Binance and KuCoin were recently acknowledged as the first offshore crypto entities to register with FIU, highlighting the importance of aligning with local regulations.
- The move towards registration gained momentum after FIU-IND issued warnings to nine offshore crypto exchanges in December 2023, including Binance.
Legal Battles in Canada
- Binance is challenging a $6 million fine imposed by Fintrac in Canada for failure to register as a foreign money services business and report large virtual currency transactions.
- The exchange argues that its activities in Canada were minimal and incidental to its global operations.
- This appeal comes on the heels of a $4.3 billion settlement in the U.S. for anti-money laundering and sanctions breaches.
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