The Startup India Insight
Filed inTweetShareRead later

FIU Imposes INR 18.82 Cr Fine on Binance for PMLA Violations

21 June, 20243 min read

In a significant move FIU has imposed a fine of INR 18.82 crore on Binance for PMLA Violations.

Financial Intelligence Unit (FIU) take this action against Binance due to failures in complying multiple provisions of PMLA, 2002.


FIU's Notification

According to a notification issued by the FIU, Binance has been found guilty of violating multiple sections of the PMLA.

The law, enacted to prevent money laundering and combat the financing of terrorism, mandates stringent reporting and compliance requirements for financial institutions and intermediaries.

However, Binance's operations fell short of these legal expectations, leading to the imposition of this substantial fine.

Background of the Issue

FIU issued a notice to Binance along with eight other crypto exchanges due to not following multiple provisions of PMLA, 2002 and other acts.

These notices highlighted the illegal operations of these exchanges within India.

Despite the warnings, Binance continued its activities without making the necessary regulatory adjustments. This non-compliance has now culminated in the recent punitive action by the FIU.

Impact on Binance's Operations in India

After this action taken by FIU, Binance stopped its P2p Cash payment options in India.


The decision to halt cash transactions was seen as a response to increasing regulatory scrutiny.

However, the latest fine indicates that Binance's efforts were insufficient in addressing the FIU's concerns.

Compliance with PMLA

India regulatory framework have a act of 2002 called Prevention of Money Laundering Act, 2002.

This law help Government of India to prevent the nation from money laundering issues.

It requires financial entities to maintain robust records of their transactions and report suspicious activities to the authorities.

Binance's failure to adhere to these provisions not only undermines the effectiveness of the law but also raises concerns about the transparency and security of its operations.

The Broader Implications

The FIU's action against Binance is part of a broader crackdown on cryptocurrency exchanges that operate outside the bounds of Indian law.

This move underscores the importance of regulatory compliance for all financial intermediaries, especially those dealing with digital currencies.

It also serves as a warning to other crypto exchanges to align their operations with national regulations or face similar consequences.

Binance's Response

In response to the fine, Binance has issued a statement expressing its commitment to complying with local laws and regulations.

The company has indicated that it is reviewing the FIU's notification and intends to take necessary steps to address the identified issues.

Binance has also emphasized its ongoing efforts to enhance its compliance framework and ensure the highest standards of transparency and security.

Future Prospects

The imposition of this fine is likely to have far-reaching effects on Binance's business strategy in India.

It may prompt the exchange to adopt more stringent compliance measures and engage more closely with regulatory authorities.

Additionally, other crypto exchanges operating in India are expected to take heed of this development and bolster their compliance efforts to avoid similar punitive actions.

Author Thoughts

The FIU's decision to slap a fine of INR 18.82 crore on Binance for PMLA Violations marks a pivotal moment in the regulation of cryptocurrency exchanges in India.

Its important legal and regularty frameworks to keep eye on such activities, so that they can ensure the integrity and security of financial transactions.

As the cryptocurrency market continues to evolve, regulatory compliance will remain a key factor in determining the success and sustainability of crypto exchanges in the country.

Leave a Reply

Your email address will not be published.Required fields are marked *