On May 9, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) revealed that it had imposed a fine of. 6,002,000 CAD or $4.4 million administrative penalty on Binance Holdings Limited. This penalty is a result of a lack of compliance associated with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) by Binance. More precisely, the regulator said that Binance did not comply with the regulations of the registration as a foreign money services business (FMSB) and the report of the transactions of the cryptocurrencies that exceed $10,000.
Details of Regulatory Non-Compliance
Over the period spanning from June 2021 to July 2023, FINTRAC observed that Binance conducted a total of 5,902 transactions with a value of $10,000 each, and all failed to be reported as needed. While this was going on, Binance had been in the process of shutting down its operations in Canada due to regulatory hurdles and disclosed it was leaving the Canadian market in May of 2023. Although Binance was given several chances to fulfill the mandates for registration, the deadlines set by FINTRAC were never met. As a consequence, Binance was in breach of its registration obligations until all of its operations were terminated on Sept 25, 2023.
Broader Legal Challenges
Beyond the FINTRAC fine, Binance has had substantial legal issues in other jurisdictions, too. In November last year, Binance settled with U. S regulators, paying $4.3 billion in penalties due to compliance failures. Changpeng Zhao, CEO of Binance, also resigned as part of the settlement, and he pleaded guilty to one of the felony charges and received a four-month jail term. In addition, the exchange has legal problems in Nigeria, where two of its executives were detained in March on allegations of tax evasion and money laundering. According to reports, one of the executives reportedly absconded to Kenya, with Interpol ready to extradite him to Nigeria for further court proceedings that start on May 17.
