FIU Imposes Rs 9.27 Crore Penalty On Bybit For PMLA Violations

The Indian government has imposed a fine of Rs 9.27 crore on Bybit Fintech Limited (Bybit), a virtual digital asset service provider (VDA SP), for violating the Prevention of Money Laundering Act, 2002 (PMLA).

The Financial Intelligence Unit-India (FIU-IND) levied the penalty in connection with Bybit’s failure to comply with its obligations under the PMLA.

The company expanded its services in India without obtaining mandatory registration with FIU-IND, the agency stated.

The Ministry of Finance noted, “The persistent and continuous non-compliance caused FIU-IND to block their websites to stop operations under the Information Technology Act, 2000 through the Ministry of Electronics and Communication Technology (MEITY).”

In March 2023, FIU-IND issued comprehensive guidelines on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) for virtual digital asset services.

A detailed circular about the registration of Virtual Digital Asset Service Providers as reporting entities released on 17 October 2023.

Following a detailed investigation into Bybit’s operations, the FIU-IND concluded that the company was responsible for several violations.

Earlier this month, Bybit restricted its services for Indian users, citing regulatory concerns.

In March 2023, the government brought crypto businesses under the PMLA, requiring them to report suspicious transactions and perform customer due diligence.

All virtual digital asset service providers were mandated to register with the FIU-IND.

Last year, Binance, another prominent crypto exchange, paid Rs 18.82 crore to the government after it registered with the FIU and resumed operations in India.

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