NAIROBI (Coinchapter.com) – Canada’s anti-money laundering agency, FINTRAC, has slapped Binance, the world’s largest cryptocurrency exchange, with a hefty $4.38 million fine. This stern action comes after Binance failed to comply with the country’s money laundering and terrorist financing laws. Despite repeated warnings, Binance did not register as a foreign money services business.
Moreover, the crackdown highlights the escalating regulatory scrutiny faced by Binance. It underscores the importance of adhering to anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. Binance allegedly failed to report a staggering 5,902 separate virtual currency transactions worth $10,000 or more. This occurred between June 1, 2021, and July 19, 2023.
Binance Fined – Regulatory Tightening Grips Crypto Industry
Notably, the FINTRAC penalty against Binance is the latest development in a series of regulatory actions targeting the cryptocurrency exchange. In recent months, the company has faced increased scrutiny from authorities worldwide, with its former CEO, Changpeng Zhao, pleading guilty to violating U.S. money laundering laws and receiving a four-month prison sentence.
Furthermore, Binance agreed to pay a staggering $4.32 billion penalty to U.S. regulators and Zhao was ordered to pay an additional $100 million in fines. These events underscore the mounting pressure on crypto firms to enhance their AML and CTF compliance measures.
“Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is in place to protect the safety of Canadians and the security of Canada’s economy. FINTRAC will continue to work with businesses to help them understand and comply with their obligations under the Act. We will also be firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed.”
Sarah Paquet, Director and Chief Executive Officer, FINTRAC
Binance’s Response and Path Forward
Last year, Binance ceased operations in Canada, citing regulatory challenges. The exchange faces scrutiny from various regulators worldwide, including the U.S. Securities and Exchange Commission (SEC). Binance previously pleaded guilty to violating U.S. anti-money laundering laws and agreed to pay a hefty fine. Additionally, Binance is embroiled in legal battles in Nigeria, where it faces accusations of money laundering and tax evasion.
Certainly, the Binance financial penalty by FINTRAC is part of Canada’s efforts to enforce financial regulations. Notably, Toronto-Dominion Bank recently faced a C$9.19 million penalty for compliance failings related to monitoring and reporting suspected money laundering and terrorist financing. Above all, under Canada’s Proceeds of Crime and Terrorist Financing Act, administrative penalties aim to encourage businesses to improve compliance rather than punitive measures.
