Binance Faces $4.38M Fine from Canada's Anti-Money Laundering Watchdog

Thursday, 09/05/2024 | 15:53 GMT by Tareq Sikder

The firm failed to register with FINTRAC and omitted reporting over 5,900 virtual currency transactions.

It halted operations in Canada last year, leading to queries about its regulatory compliance.

Canada's Financial Transactions and Reports Analysis Centre (FINTRAC) has taken action against cryptocurrency exchange Binance, imposing a hefty fine of nearly USD 4.38 million (C$6 million) for violations related to money laundering and terrorist financing laws.

Canada Imposes Fines for Money Laundering Violations

The regulatory body disclosed that Binance had failed to comply with essential requirements, notably neglecting to register as a foreign money services business with FINTRAC despite multiple deadlines. Furthermore, it was revealed that the exchange had neglected its obligation to report the receipt of virtual currency amounting to C$10,000 or more on a staggering 5,902 occasions. This concerning lapse in reporting occurred between June 1, 2021, and July 19, 2023.

Notably, Binance ceased its operations in Canada last year, raising questions about its compliance with regulatory standards during its tenure in the country's cryptocurrency market. In response to queries regarding the fine and the violations, Binance remained silent, not providing an immediate comment to Reuters.

Founder Sentenced and Philippines Regulator Cracks Down

Earlier, Binance's Founder, Changpeng Zhao, received a four-month prison sentence for allowing money laundering on the exchange, as Finance Magnates reported. The sentence, handed down in a Seattle federal court, followed a deal with the US government in November, where Zhao agreed to step down as CEO to settle an investigation. Despite federal prosecutors seeking a three-year term, Zhao's sentence was lighter. He was convicted of failing to implement effective anti-money laundering programs, violating the Bank Secrecy Act.

Meanwhile, the Philippines' securities regulator has cracked down on Binance, instructing Google and Apple to remove the exchange's apps from their app stores. This move has come amid accusations of Binance offering unregistered securities to Filipino investors. The Securities and Exchange Commission emphasized the risk to investors' funds posed by Binance's presence, alleging that the exchange's apps facilitate illegal activities. The action follows findings that Binance promoted its services to attract funds from Filipinos without the requisite licensing.