Binance has been hit with a $2.25 million fine in India for operating in the country in violation of local anti-money laundering rules.

India’s Financial Intelligence Unit (FIU) imposed a multi-million fine on Binance as the cryptocurrency exchange failed to register with the FIU to comply with its anti-money laundering (AML) rules.

In an official Jun. 19 statement, the regulator said it imposed a total penalty of 188.2 million rupees (around $2.25 million) for violating multiple AML rules as well as directives focused on combating the financing of terrorism. As of press time, Binance made no public statements on the matter.

According to a Chainalysis report, India is one of the fastest-growing crypto economies, with the highest adoption rate as of 2023. In mid-April, Coin Insider Daily reported that Binance agreed to pay another $2 million penalty following a four-month ban placed on the exchange by the FIU.

Before the January ban, Binance reportedly dominated over 90% of the Indian crypto trading volume. The exchange’s popularity surged as traders sought to bypass tax implications imposed by the Indian government.

In March, India’s Ministry of Finance mandated that all crypto businesses register with the FIU and comply with PMLA provisions. By December 2023, 28 cryptocurrency firms had already registered with the national AML agency, as reported by Coin Insider Daily.

Crypto remains a contentious issue in India, with regulators divided on how to approach the emerging industry. India’s Minister of Finance, Nirmala Sitharaman, called on international collaboration toward building a comprehensive crypto framework and urged governments to consider blockchain’s merits. However, the Reserve Bank of India hasn’t changed its stance on crypto and argued for a blanket ban on digital assets.

In a response sent to Coin Insider Daily, Binance said that they have been made aware of the FIU’s order and will be determing its next steps.

“We wish to work with the FIU as a reporting entity and we are enthusiastic about reentering the Indian market to contribute positively, should we be able to do so in the near future. We remain dedicated to maintaining transparency, fostering cooperation, and ensuring compliance with regulatory authorities.”