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Binance Aids India’s Enforcement Directorate Tackle Major Crypto Scam
Leading cryptocurrency exchange Binance claims to have helped India’s Enforcement Directorate (ED) investigate financial crimes, putting up to four individuals behind bars. According to the announcement made by the digital asset service provider, these entities played crucial roles in a gaming scam that siphoned up to $47.6 million from their victims.
The arrested individuals were the brains behind the Fiewin gaming app. Victims were lured into online betting and gaming with promises of easy earnings before their funds were trapped.
Public-private Collaboration to Mitigate Crypto ScamsBinance provided critical intelligence to the authorities, making it easier to trace the funds and uncover the illicit activities. The “ED’s investigation uncovered links to digital wallets together with deep cooperation from Binance’s Financial Intelligence Unit (FIU).” However, it is unknown whether they could recover the funds through collaboration.
This is not the first time the crypto industry has seen such a collaborative effort between a crypto firm or individual and the authorities. In the wake of the implosion of Bahamian-headquartered crypto exchange FTX, a few firm executives, including Caroline Ellison, testified against Sam Bankman-Fried as a way of cooperating with the authorities.
Their testimonies eventually closed the case, and Bankman-Fried was sentenced to 25 years in prison, which he is currently serving at the Metropolitan Detention Center. Binance also worked with the ED in 2022, when it helped freeze millions of dollars as part of a money laundering investigation related to the gaming app E-Nuggets.
One unnamed ED’s representative, cited by Binance, stated that such public-private collaborations are crucial in tackling complex financial crimes. He further acknowledged how effective the analytical support provided by Binance was. Meanwhile, the Richard Teng-led digital asset service provider was one of the foreign exchanges registered with India’s Financial Investigation Unit (FIU) earlier this year.
Binance Faces Regulatory Hurdles in IndiaIt is worth noting that Binance has also had some troubles in India. Last year, the exchange was named alongside KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex as violators of Anti-Money Laundering (AML) rules. As a result, a compliance notice was issued to them, and the Ministry of Electronics and Information Technology was ordered to block their URLs.
About seven months later, India’s FIU fined Binance approximately $2.2 million (18.82 crore INR) and suspended it from the region. Again, the agency accused the exchange of failing to adhere to the country’s AML regulations. All these confirm that Binance has faced several regulatory hurdles in India despite its crime-fighting role.
This did not deter the exchange from helping the authorities catch the bad actors in the crypto ecosystem. The exchange announced its return to India on August 15, citing that it has registered as a reporting entity with India’s FIU.
Binance is now legally allowed to offer its products and services to users in the region in compliance with local regulations.
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