Binance fined $4.4 million in Canada for AML lapses

abdelaziz Fathi

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has imposed a hefty fine on cryptocurrency exchange giant Binance for non-compliance with money laundering regulations. The action was the result of findings from a compliance activity conducted in 2023.

The regulatory body cited two specific breaches: Binance’s failure to register as a foreign money services business and its failure to report a single virtual currency transaction exceeding $10,000.

As a result, FINTRAC issued an administrative monetary penalty of $6,002,000 CAD (roughly $4.4 million USD) against Binance Holdings Limited, which operates under various names including Binance Holdings (IE) Ltd., Binance.com, Binance Global, and Binance.

FINTRAC, which functions as part of Canada’s financial intelligence unit, is tasked with detecting and preventing money laundering, terrorism financing, and other illicit activities within the Canadian financial ecosystem. The regulator uses blockchain analytics to uncover that Binance failed to report the receipt of an amount in virtual currency of $10,000 or more on 5,902 separate occasions between June 1, 2021, and July 19, 2023.

This is not the first time Binance has faced regulatory scrutiny in Canada. The country’s recent moves to impose stricter rules on digital asset trading platforms prompt Binance, the world’s biggest crypto exchange, to cease its operations.

Binance said earlier that the new guidance issued for cryptocurrency exchanges in Canada, which relates to stablecoins and investor limits, has made it “no longer tenable” for the company to operate in the country.

Previously, Binance was under fire from a Canadian provincial regulator for allegedly violating Ontario securities law. The industry’s giant opted to pull out of Ontario, rather than comply with securities law or face regulatory scrutiny.

In November 2023, the US Department of Justice sought a $4 billion plea deal from Binance to resolve investigations into money laundering, fraud, and sanctions violations.

As part of the settlement, former CEO Changpeng ‘CZ’ Zhao agreed to step down from his role and paid a $50 million fine. Zhao was also sentenced to four months in prison in April 2024 after pleading guilty to violating anti-money laundering sanctions regulations.

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