Binance Hit with $2.25m Fine by India's FIU Amid Nigeria Court Battle

Nigerian court hearing continues, while India's FIU fines Binance $2.25 million

Binance faces $2.25M fine from India's FIU for non-compliance with AML regulations, as Nigerian court case continues over alleged tax evasion and money laundering activities.

The Financial Intelligence Unit (FIU) of India has fined Binance 188.2 million rupees ($2.25 million), as the cryptocurrency exchange company fights to preserve its good name during a legal battle that is still pending in Nigeria.

Crypto exchanges and other virtual asset service providers in India are required to register as reporting companies with the FBI and abide by its anti-money laundering guidelines.

In an attempt to restart operations in India, Binance registered with the FIU in May after the agency sent show-cause letters to nine offshore exchanges for failing to comply with local laws.

The fine was imposed by India's FIU for breaking its money laundering laws, according to a document titled “Order in original No. 10/DIR/FIU-IND/2024 in the matter of Binance u/s Section 13” that was received on Thursday, June 20.

According to the Indian Authority, Binance has broken three provisions of the nation's Prevention of Money Laundering Act (PMLA), 2002, as a registered organization.

“Consequently, due to Binance's ongoing provision of services to Indian clients and operations within India without adhering to its statutory obligations under the PMLA a Notice dated December 28, 2023, was issued to Binance pursuant to Section 13 of the Act, compelling Binance to demonstrate why appropriate action should not be undertaken against it for its dereliction of duties under the Act, despite its status as a Reporting Entity owing to its operations as a Virtual Digital Asset Service Provider (VDA SP).” India's FIU said.

“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 vide order dated 19th June 2024 in the exercise of powers under Section 13 PMLA, imposed a total penalty of Rs. 18,82,00,000 (Rupees Eighteen Crore Eighty Two Lakh Only) on the Binance with reference to the following violations committed by the Binance: Cntravention of Section 12(1), PMLA rw Rules 7(1), PML Rules (i) Contravention of Section 12(1), PMLA rw Rules 3(1)(D) and 7(3), PML Rules () Contravention of Section 12(1), PMLA r'w Rule 8(2) PML Rules.”

“Furthermore, specific directions have also been issued to Binance to ensure diligent compliance with the obligations outlined in Chapter IV of the Prevention of Money Laundering Act (PMLA) of 2002, in conjunction with the PMLA Maintenance of Record Rules (PMLA Rules) of 2005 for the prevention of money laundering activities and combating the financing of terrorism (AMLCFT).” India's FIU said.

The Federal Inland Revenue Service (FIRS) of Nigeria has accused Binance of evading taxes.

Furthermore, the business has been charged by the Economic and Financial Crimes Commission for using its platform to launder more than $35 million.

The recent allegations by the Federal Government regarding the influence of cryptocurrency exchanges on foreign exchange (FX) rates have led to heightened surveillance of cryptocurrency trading platforms.

Two senior Binance officials were arrested by Nigerian authorities in February. Nadeem Anjarwalla, a 37-year-old British-Kenyan who serves as the regional manager for Africa, and Tigran Gambaryan, a 39-year-old American who is Binance's head of financial crime compliance, are both American nationals.

Executives from Binance visited Nigeria for a meeting following the Federal Government's prohibition of cryptocurrency channels and the start of a campaign against currency speculation.

The Federal Inland Revenue Service (FIRS) has now filed amended accusations against Gambaryan and Anjarwalla, with Binance as the sole defendant, despite the fact that the Federal High Court recently dismissed the FIRS's tax evasion case against Binance.