Key Insights
- Canadian regulators fined Binance $4.3 million for not registering as a foreign money services business and neglecting transaction reporting.
- FINTRAC discovered that Binance failed to report 5,902 cryptocurrency transactions exceeding $10,000 from June 2021 to July 2023 using blockchain tools.
- The fine aligns with Canada’s ongoing efforts to regulate crypto exchanges amid similar penalties faced by Binance in the U.S. and other countries.
Canadian regulators have fined Binance, the world’s largest cryptocurrency exchange, C$6 million ($4.3 million) for failing to register as a foreign money services business and neglecting to report significant cryptocurrency transactions. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) levied the penalty after finding Binance committed two separate violations of Canadian financial regulations.
#FINTRAC has imposed an administrative monetary penalty of $6,002,000 on Binance Holdings Limited, a foreign money services business. For more information, consult the Centre’s website: https://t.co/x7KF5M3s2v pic.twitter.com/slFic4gJWo
— FINTRAC_Canada (@FINTRAC_Canada) May 9, 2024
Between June 2021 and July 2023, the Canadian regulators found that Binance had yet to report 5,902 cryptocurrency transactions over C$10,000, including their associated know-your-customer (KYC) data. The agency made this discovery using blockchain explorer tools.
The Canadian regulators emphasized that Binance was provided with multiple opportunities to register as a foreign money services business but failed to comply. The fine marks a significant step in Canada’s efforts to enforce financial regulations in the burgeoning cryptocurrency sector.
This penalty follows closely behind Binance’s $4.3 billion agreement with U.S. regulators to settle anti-money laundering charges. Former CEO and co-founder Changpeng “CZ” Zhao was also sentenced to four months in prison for failing to establish adequate anti-money laundering (AML) protocols at the exchange.
In addition to these issues, Binance continues to face legal battles in Nigeria over alleged money laundering and tax evasion. The exchange has also encountered scrutiny from regulators globally, including the U.S. Securities and Exchange Commission (SEC).
FINTRAC’s penalty aligns with Canada’s Proceeds of Crime and Terrorist Financing Act, which encourages businesses to comply with regulatory requirements rather than merely impose punitive measures. Notably, Toronto-Dominion Bank recently received a C$9.19 million penalty for similar compliance failures.
