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India’s Financial Intelligence Unit (FIU) has imposed a fine of almost $2.3 million (18 crore 82 lakh Indian rupees) on cryptocurrency exchange Binance for its alleged failure to adhere to the country’s anti-money laundering and combating financing of terrorism (AML/CFT) regulations.

In a June 19 notice, the FIU, which handles information about suspicious financial transactions, said Binance has ongoing operations in India, serving local clients without adhering to statutory requirements under the nation’s anti-money laundering act.

Binance was issued show-cause notices by Indian authorities dated December last year and removed from India for “operating illegally” in January 2024. Other offshore crypto exchanges, including KuCoin, were issued similar notices and blocked in the country.

Both Binance and KuCoin were granted approval by the FIU in May, marking the first time offshore crypto entities have received such recognition from the Indian financial watchdog. The approval, however, comes with a caveat for both companies: they must first pay a penalty determined after a hearing with the FIU.

However, the FIU, after reviewing Binance’s submissions and the evidence, determined that the accusations against the cryptocurrency exchange were valid, imposing a “total penalty” of $2.3 million on the exchange.

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In addition, Binance has been explicitly instructed to strictly adhere to the requirements for preventing money laundering and combating the financing of terrorism, as detailed in the Prevention of Money Laundering Act (PMLA) of 2002 and the corresponding PMLA Maintenance of Record Rules of 2005.

The FIU’s action against Binance is the latest among the exchange’s recent regulatory woes. In May, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposed a $4.4 million administrative monetary penalty on the platform for failing to comply with the watchdog’s AML/CFT regime.

FINTRAC stated that Binance failed to register as a required foreign money services business and did not report cryptocurrency transactions exceeding 10,000 Canadian dollars, as mandated by Canadian law.

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