The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has made a significant move by imposing an administrative monetary penalty (AMP) of $4.4 million on Binance. This penalty comes as a result of Binance’s failure to register and report large transactions involving digital assets.
In a notice issued on May 9, FINTRAC stated that it has taken action against Binance Holdings Ltd. for noncompliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. FINTRAC’s statement acknowledges the serious misconduct of the Binance entity, which includes not registering as a foreign money services business and neglecting to disclose the necessary financial transactions.
The penalty imposed on Binance by FINTRAC amounts to 6,002,000 CAD, which is approximately $4.4 million. According to the regulator, the need to pay this penalty arises from Binance’s actions in 2023, when the exchange was being shut down in Canada. Binance announced on Twitter in May 2023 that regulatory issues in Canada were the reason behind this move.
Data from FINTRAC reveals that there have been 5,902 separate cryptocurrency transactions worth at least $10,000 each with Binance from June 2021 to July 2023.
It is noted that Binance Holdings Limited was repeatedly reminded to register with FINTRAC as a foreign money services business, but they failed to complete the registration process by the given deadlines. It is worth mentioning that before September 25, 2023, Binance Holdings Limited had already been recognized as a foreign money service provider and was required to register with the Financial Transactions and Reports Analysis Centre of Canada. However, compliance with these requirements became impossible after the specified date, leading to the cessation of Binance Holdings Limited’s operations in the Canadian market.
Although the $4 million penalty is distinct from other legal issues and ongoing disputes faced by Binance in various jurisdictions worldwide, the company affirms its commitment to complying with all regulations through its advanced anti-money laundering systems. Nevertheless, in November 2023, the company was compelled to pay an additional $4.3 billion in penalties.
As part of the settlement, Changpeng Zhao, the CEO of Binance, resigned from the company and pleaded guilty to one crime. In the most recent status hearing, he was sentenced to four months in jail.
In February, Binance managers accused of tax evasion and money laundering were welcomed by law enforcement authorities in Nigeria. Interpol is reportedly collaborating with Kenyan police in case the ongoing investigations in Nigeria indicate that the suspect has fled to Kenya. The intention is to extradite the suspect to Nigeria, where court proceedings are scheduled to resume on May 17th.
