The world’s largest crypto exchange Binance has been penalized $2.2 million by Indian regulators for providing services to native traders and investors without abiding by the anti-money laundering regulations laid out.
Earlier this year, nine offshore crypto exchanges were thrust with show cause notices. In retrospect, they were evicted from the country for operating illegally.
On the heels of a hearing with the country’s Financial Intelligence Unit [FIU] last month, Binance became one of the first entities to be green-flagged after agreeing to pay a fine. Likewise, even KuCoin was granted approval.
The latest FIU announcement noted,
“After considering the written and oral submissions of the Binance, Director, FIU-IND, based on the material available on record, found that the charges against Binance were substantiated.”
Consequently, the Director FIU-IND ordered the imposition of a multi-million dollar penalty. Alongside, the regulator also handed out "specific directions” to ensure “diligent compliance with the obligations” pertaining to the prevention of money laundering activities and combating the financing of terrorism.
Vivek Aggarwal, the Director of FIU-IND has time and again asserted that taxes and fines “should not be considered proof of the legitimacy of the crypto industry.”
India has maintained a cold relationship with crypto. The central bank ended up banning this asset class in 2018, which the Supreme Court ended up overturning a couple of years later.
The Asian nation then introduced a 30% tax on crypto profits and a 1% TDS on all transactions in 2022. That single-handedly managed to drive a substantial chunk of investors outside the crypto arena. Aggarwal recently said,
“Whether cryptos are legitimate or not should depend on dedicated regulations, which are yet to be taken up by Parliament and policymakers. Adherence to laws is a base requirement of all companies that are registered in India and offer services to Indian consumers. This has nothing to do with legitimizing the crypto industry.”
