Canada’s financial intelligence unit, FINTRAC, has imposed a significant fine of $4.38 million on Binance, the world’s largest cryptocurrency exchange. This action was taken due to Binance’s failure to comply with Canada’s laws on money laundering and terrorist financing. Despite multiple warnings, Binance did not register as a foreign money services business.
This crackdown emphasizes the increasing regulatory scrutiny faced by Binance and highlights the importance of adhering to anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. Binance allegedly did not report a staggering 5,902 separate virtual currency transactions worth $10,000 or more between June 1, 2021, and July 19, 2023.
The fine imposed on Binance by FINTRAC is the latest in a series of regulatory actions against the cryptocurrency exchange. In recent months, Binance has faced heightened scrutiny from authorities worldwide. Its former CEO, Changpeng Zhao, pleaded guilty to violating U.S. money laundering laws and received a four-month prison sentence. Additionally, Binance agreed to pay a massive $4.32 billion penalty to U.S. regulators, and Zhao was ordered to pay an additional $100 million in fines. These incidents highlight the increasing pressure on crypto firms to improve their AML and CTF compliance measures.
Last year, Binance ceased operations in Canada due to regulatory challenges. The exchange is under scrutiny from various regulators globally, including the U.S. Securities and Exchange Commission (SEC). Binance has previously admitted guilt in violating U.S. anti-money laundering laws and agreed to pay a substantial fine. Furthermore, Binance is currently involved in legal disputes in Nigeria, where it faces accusations of money laundering and tax evasion.
The financial penalty imposed by FINTRAC on Binance is part of Canada’s efforts to enforce financial regulations. Notably, Toronto-Dominion Bank recently faced a penalty of C$9.19 million for compliance failures related to monitoring and reporting suspected money laundering and terrorist financing. Overall, under Canada’s Proceeds of Crime and Terrorist Financing Act, administrative penalties aim to encourage businesses to improve compliance rather than impose punitive measures.
