Binance has been fined $2.25 million in India for operating without adhering to local anti-money laundering rules.

India’s Financial Intelligence Unit (FIU) imposed this multi-million fine on Binance because the cryptocurrency exchange failed to register with the FIU and comply with its anti-money laundering (AML) regulations.

In an official statement on June 19, the regulator announced a total penalty of 188.2 million rupees (approximately $2.25 million) for violating multiple AML rules and directives aimed at combating the financing of terrorism. As of now, Binance has not made any public comments regarding the fine.

According to a Chainalysis report, India is one of the fastest-growing crypto economies, boasting the highest adoption rate in 2023. In mid-April, it was reported that Binance agreed to pay another $2 million penalty after a four-month ban was placed on the exchange by the FIU.

India’s central bank has expressed ongoing concerns over cryptocurrencies, which the government cannot ignore. Before the January ban, Binance reportedly dominated over 90% of the Indian crypto trading volume. The exchange’s popularity soared as traders looked to bypass tax implications imposed by the Indian government.

In March, India’s Ministry of Finance required all crypto businesses to register with the FIU and comply with the Prevention of Money Laundering Act (PMLA) provisions. By December 2023, 28 cryptocurrency firms had already registered with the national AML agency.

Crypto remains a contentious issue in India, with regulators divided on how to manage the emerging industry. India’s Minister of Finance, Nirmala Sitharaman, has called for international collaboration to build a comprehensive crypto framework and urged governments to consider the benefits of blockchain technology. However, the Reserve Bank of India maintains its stance on a blanket ban on digital assets.

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