The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has announced that it will be imposing a hefty fine of $4.4 million on Binance for its failure to comply with regulations regarding the registration and reporting of large digital asset transactions.
In a notice issued on May 9, FINTRAC stated that Binance Holdings Limited was being penalized for its noncompliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. The regulator revealed that Binance had neglected to register as a foreign money services business and had also failed to report digital currency transactions that exceeded the threshold of $10,000.
As per FINTRAC, the fine of 6,002,000 CAD, equivalent to around $4.4 million, was imposed on Binance for its activities that resulted in the penalty. These activities took place in 2023, during the period when Binance was winding down its operations in Canada. Cointelegraph reached out to Binance for a comment, but no response was received at the time of publication.
Binance had previously announced in May 2023 that it intended to withdraw from the Canadian market due to concerns surrounding regulatory compliance. FINTRAC disclosed that it had identified 5,902 separate transactions involving cryptocurrencies worth $10,000 or more on the Binance exchange between June 2021 and July 2023.
FINTRAC stated, “Binance Holdings Limited was given multiple opportunities to register with FINTRAC as an FMSB, but they failed to complete their registration within the given deadlines. It is important to note that Binance Holdings Limited was considered an FMSB and was obligated to register with FINTRAC until September 25th, 2023, when it officially ceased all operations in Canada. Until that date, Binance Holdings Limited was in violation of its registration requirements.”
It is worth noting that the $4.4 million penalty is separate from the legal troubles that Binance has encountered or is currently facing in other jurisdictions. In November 2023, the company reached a settlement with authorities in the United States, which required it to pay $4.3 billion in penalties. As part of the agreement, Changpeng Zhao stepped down as CEO and pleaded guilty to a felony charge. He subsequently received a four-month prison sentence.
In Nigeria, two Binance executives were arrested in February on charges of tax evasion and money laundering. While one of the individuals reportedly managed to escape to Kenya, Interpol has expressed its readiness to extradite him back to Nigeria. Court proceedings are expected to resume on May 17.
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