India's Financial Intelligence Unit (FIU) has fined Binance, the world's largest crypto exchange, 188.2 million rupees ($2.25 million) for breaching local anti-money laundering regulations. The country mandates that virtual digital asset service providers, including crypto exchanges, must register with the FIU and adhere to its rules. Binance recently registered with the FIU in May to resume operations but has not yet commented on the fine.

Earlier, Binance received a show-cause notice from the FIU and eight other offshore exchanges for non-compliance. In response, the FIU requested that the Ministry of Electronics and Information Technology block access to these exchanges. In contrast, KuCoin, another crypto exchange, registered with the FIU in March and faced a significantly more minor penalty of 3.45 million rupees.

Why does it matter?

The legal sanction isn't Binance's only run-in with regulatory bodies, as Canada fined the exchange$4.38 million in May for similar violations. Additionally, Binance's former CEO, Changpeng Zhao, was sentenced to four months in prison in the US for violating anti-money laundering laws.