India’s Financial Intelligence Unit (FIU) has fined crypto exchange Binance, ranked as the world’s largest crypto exchange by volume. The fine levied against Binance is 188.2 million rupees, which equates to roughly $2.25 million and is a result of violating India’s anti-money laundering regulations.
Binance Fine First Step In Its Re-Entry To The Indian Market
In December 2023, the FIU banned the URLs of nine foreign cryptocurrency exchanges, with Binance being the most high-profile. Kraken, Huobi and KuCoin were other notable exchanges also restricted by Indian regulators. The order ensured Apple and Google removed local access to these crypto exchanges from their respective app stores.
🚨 BREAKING: @Binance has been fined $2.2M for not following India’s anti-money laundering rules while serving Indian clients. pic.twitter.com/Vng7mtCMGh
— Cointelegraph (@Cointelegraph) June 20, 2024
Under the existing rules, cryptocurrency exchanges are required to register with the Indian FIU as reporting entities and adhere to the local anti-money laundering rules. Furthermore, there are also requirements for exchanges to withhold taxes on crypto transactions and profits.
Of the banned exchanges, KuCoin was the first to fully comply with the Indian regulations, back in March and has since paid a penalty of 3.45 million rupees (roughly $41,200). Binance followed suit, registering with the FIU in May 2024. Once the $2.25 million fine has been paid by Binance, it will be allowed to resume its operations in India.
India Still Split On Feelings Toward Cryptocurrency
Cryptocurrency remains a hot topic in India. Regulators are split on the best approach regarding the booming industry.
Speaking at the Global Fintech in 2023, Finance Minister of India, Nirmala Sitharaman, called for a world-wide collaboration in order to create a globally recognised crypto regulatory framework. In the same speech, she urged governments to consider the many positive aspects of blockchain technology.
However, the Reserve Bank of India (RBI) has been consistently firm in their anti-crypto stance.
In January 2023, RBI Governor Shakatikanta Das equated cryptocurrency to gambling. In the same speech, he called for a ban on all forms of crypto.
Das re-iterated his stance at the Kautilya Economic Conclave 2023, where he said, “on crypto, I have already spelt out our position very clearly time and again and we continue with the same view now”.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
