Canada Imposes $4M Fine on Binance for AML Violations

FINTRAC, a financial regulator in Canada, fines Binance $4 million for breaching anti-money laundering and anti-terrorist financing laws.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced a 6 million CAD fine, equivalent to $4.4 million, for Binance Holdings Limited’s violation of the country’s anti-money laundering and anti-terrorist financing laws in a press release on May 9. 

According to the regulatory body, Binance breached the law in two instances. Initially, the exchange failed to register as a foreign financial service provider. On a second note, Binance neglected to report digital transactions exceeding $10,000 between June 2021 and July 2023.

Recall that Binance announced its exit from the Canadian market last May, citing new cryptocurrency legislation surrounding stablecoins. The Canadian Securities Administrators (CSA) disclosed a ban on stablecoin deposits and purchases without prior approval.

Speaking on the latest development, Sarah Paquet, the director of FINTRA, stated that Canada’s regulations on Anti-Money Laundering and Anti-Terrorist Financing are designed to safeguard Canadians and the economy’s stability. She added that FINTRAC will persist in helping businesses comprehend and meet their duties.

FINTRAC ensures that entities operating in Canada adhere to the Money Laundering and Terrorist Financing Act. FINTRAC also collects and analyzes financial data to support law enforcement and national security efforts against money laundering and terrorism financing.

Binance Strikes Plea Deal Amid Regulatory Crackdown, CZ Faces Penalties and Resignation

Meanwhile, this recent development adds to Binance Holdings Limited’s multiple regulatory issues. Recall that the digital asset service provider agreed to a settlement with the US Department of Justice that involved the forfeiture of $2.51 billion and a fine. 

As part of the deal, Binance’s Founder and former CEO Changpeng Zhao (CZ) was penalized $50 million and asked to resign. CZ was later handed a four-month sentence after he was found guilty of money laundering charges. 

In addition, Binance is currently battling regulatory issues in Nigeria, Africa’s most populous nation, where two of its representatives were arrested. Binance faces allegations of violating Anti-Money Laundering laws and contributing to the devaluation of the Naira. However, Binance CEO Richard Teng recently accused Nigerian authorities of seeking bribes to close the case.