FINTRAC Imposes $4.4M Penalty on Binance Over Regulatory Violations

Last Updated on May 10, 2024

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Key Takeaways:

  • Regulatory Non-Compliance: Binance faced a $4.4 million fine from FINTRAC for failing to register as a foreign money services business in Canada and not reporting transactions exceeding $10,000.
  • Global Legal Issues: Binance’s legal challenges extend globally, including a $4.3 billion settlement in the U.S., tax evasion and money laundering charges in Nigeria, and operational cessation in Canada.
  • Ongoing Scrutiny: The penalties and legal troubles reflect heightened global regulatory scrutiny on cryptocurrency exchanges, emphasizing the importance of compliance with AML and CFT regulations.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has levied a significant $4.4 million fine on Binance, the global cryptocurrency exchange, for not complying with necessary regulatory standards.

The fine was imposed for Binance’s failure to register as a foreign money services business and for not reporting digital currency transactions over $10,000.

In a recent notice dated May 9, FINTRAC detailed that Binance Holdings Limited did not meet the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations.

The regulator highlighted that Binance conducted 5,902 transactions exceeding $10,000 each from June 2021 to July 2023 but failed to report them as required.

The penalty amount, which equates to approximately 6,002,000 CAD, reflects violations that mainly occurred in 2023, a period during which Binance was phasing out its operations in Canada.

Despite several notices and opportunities to comply, Binance did not complete its registration with FINTRAC by the provided deadlines.

As of September 25, 2023, Binance ceased all operations in Canada, yet it remained non-compliant with its registration obligations until that date.

This fine is part of a broader context of legal challenges Binance faces globally.

In the United States, the company recently settled with authorities by agreeing to pay $4.3 billion in penalties.

This settlement was part of an agreement that saw Changpeng Zhao, the CEO at the time, resign and plead guilty to a felony charge, resulting in a four-month prison sentence.

Additionally, Binance’s legal troubles extend to Nigeria, where two of its executives were detained on charges of tax evasion and money laundering.

One of the accused managed to flee to Kenya, prompting Interpol to intervene, potentially leading to extradition back to Nigeria for ongoing legal proceedings scheduled for May 17.

As the international landscape for cryptocurrency regulation tightens, these developments highlight the increasing scrutiny and regulatory challenges that major exchanges like Binance face across various jurisdictions.

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Fleming Airunugba, a seasoned Web3 and crypto content expert, leverages his deep understanding of blockchain technology to bring the latest and most impactful news to the crypto community.

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