Canadian regulator FINTRAC has levied a hefty penalty against Binance, a cryptocurrency exchange, for allegedly breaching anti-money laundering rules. Today, FINTRAC’s statement highlighted two major violations committed by Binance: the absence of registration as a foreign money services business and the failure to report substantial transactions with virtual currency.
Specifically, FINTRAC alleges that Binance neglected to report transactions surpassing $10,000 on 5,902 occasions spanning from June 2021 to July 2023.
As per the regulatory body, “Binance has been identified as a foreign money services business. Binance Holdings Limited incurred an administrative fine of $6,002,000 on May 7, 2024, due to two violations.”
The penalty of $4.4 million, equivalent to 6 million CAD, was imposed following compliance checks carried out in 2023. FINTRAC, Canada’s financial intelligence unit responsible for combating money laundering and financial crimes, used blockchain analytics to pinpoint Binance’s failure to report virtual currency transactions as a critical issue for transparency in the financial system.
This development mirrors the regulatory scrutiny Binance encountered in the United States. In November 2023, the U.S. Department of Justice reached a plea deal with the exchange, resulting in a $4 billion settlement for alleged money laundering and sanctions violations.
As part of the agreement, Binance’s founder and then-CEO Changpeng Zhao was required to resign and pay a $50 million fine. Zhao subsequently received a four-month prison sentence after admitting guilt to violating anti-money laundering regulations.
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