Canada’s FINTRAC has fined Binance $4.38 million for failing to comply with the country’s anti-money laundering and terrorism financing laws. Despite multiple warnings, Binance has not registered as a foreign money services business.
In addition, the crackdown highlights the increasing regulatory scrutiny faced by Binance. This highlights the importance of complying with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. Binance allegedly failed to report 5,902 virtual currency transactions worth more than $10,000 from June 1, 2021 to July 19, 2023.
Fine for Binance - Regulation tightens control over cryptocurrency industry
Notably, FINTRAC’s penalty against Binance is the latest in a series of regulatory actions against the cryptocurrency exchange, which has come under increased scrutiny from authorities around the world in recent months, with its former CEO Changpeng Zhao pleading guilty to violating U.S. money laundering laws and sentenced to four months in prison.
In addition, Binance agreed to pay a massive $43.2 billion fine to U.S. regulators, and Zhao Changpeng was required to pay an additional $100 million fine. These events highlight the pressure cryptocurrency companies face in strengthening AML and CTF compliance measures.
Sarah Paquet, Director and CEO of FINTRAC
Binance’s response and future path
Last year, Binance ceased operations in Canada due to regulatory challenges. The exchange faced scrutiny from various regulators around the world, including the U.S. Securities and Exchange Commission (SEC). Binance previously admitted to violating U.S. anti-money laundering laws and agreed to pay a hefty fine. In addition, Binance is embroiled in legal disputes in Nigeria, facing charges of money laundering and tax evasion.
Of course, FINTRAC's financial penalty on Binance is part of Canada's strengthening of financial regulation. It is worth noting that Toronto-Dominion Bank in Canada recently faced a fine of 9.19 million Canadian dollars for its failure to monitor and report suspected money laundering and terrorist financing. In general, administrative penalties under Canada's Proceeds of Crime and Terrorist Financing Act are intended to encourage companies to improve compliance rather than punitive measures.