The cryptocurrency exchange Binance faces significant legal challenges again. India has imposed a fine of 188.2 million rupees (approximately 2.25 million US dollars) against the company for violations of anti-money laundering laws.
The Financial Intelligence Unit (FIU) of India announced that Binance had violated local anti-money laundering regulations. This move followed a 2023 announcement in which the FIU had already threatened actions against Binance if the company failed to provide satisfactory explanations for its conduct. The authority had also given Binance specific instructions to ensure compliance with anti-money laundering laws.
In January 2024, India had suspended all activities of the crypto exchange due to "illegal operations." However, in May of the same year, the FIU granted Binance a provisional trading permit on the condition that the newly imposed fine is paid. This makes Binance, along with the crypto exchange KuCoin, one of the first foreign crypto companies to receive approval from the Indian authority.
Binance responded to the fine with a statement published on CoinDesk.
This new setback comes shortly after Binance founder Changpeng Zhao was sentenced to several months in prison in the USA. In November 2023, Zhao and Binance admitted to violating money laundering laws. Zhao subsequently resigned from all his positions at Binance. His relatively short prison sentence of four months was justified by Judge Richard Jones due to Zhao's cooperation with investigative authorities and his voluntary return to the USA. In addition to the prison sentence, Binance was ordered to pay approximately 4.3 billion US dollars, of which Zhao personally has to cover 50 million US dollars.
Binance faces a similar penalty in Canada. The Canadian anti-money laundering authority imposed a fine of USD 4.38 million, also for violations of money laundering laws, as reported by Reuters.
With these incidents, Binance is facing increasing global pressure to enhance its compliance measures and ensure adherence to international regulations to avoid further legal and financial consequences.
