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India's Financial Intelligence Unit (FIU) has fined cryptocurrency exchange Binance $2.2 million for violating anti-money laundering (AML) rules, according to a statement on Wednesday.
In a surprising move, the FIU had earlier granted conditional approval to Binance to operate in India. The condition being that Binance would have to pay the fine. This move by the FIU was seen as a positive step towards regulating the cryptocurrency industry in India.
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The FIU alleged that Binance failed to comply with AML regulations, including know-your-customer (KYC) norms. The FIU claimed Binance did not adequately identify and verify its users, potentially allowing criminals to exploit the platform for money laundering.
Binance has yet to comment on the fine. However, the company has previously expressed commitment to complying with all applicable laws and regulations.
While the fine itself might discourage some crypto businesses in India, it paves the way for Binance's re-entry into a massive and rapidly growing market. Estimates suggest India boasts over 115 million crypto users, representing a significant chunk of the population. This high adoption rate is fueled by a young, tech-savvy demographic and a less-developed traditional financial system. Binance's return, if it adheres to regulations, could further accelerate this growth.
