Binance, one of the world’s largest cryptocurrency exchanges, has been fined C$6 million ($4.3 million) by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for committing two “administrative violations” of the country’s financial regulations.
The regulatory action comes amidst a series of legal challenges faced by the exchange in various jurisdictions.
TLDR
- The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) fined Binance C$6 million ($4.3 million) for two “administrative violations” of the country’s financial regulations.
- Binance failed to register as a foreign money services business despite being provided with “several opportunities” to do so.
- Between June 1, 2021 and July 19, 2023, Binance failed to report 5,902 crypto transactions bigger than $10,000 and their attached know-your-customer (KYC) information to the regulator.
- The fine comes just six months after Binance agreed to pay U.S. regulators a $4.3 billion fine for violating U.S. anti-money laundering laws.
- Former Binance CEO and co-founder Changpeng “CZ” Zhao was sentenced to four months in U.S. prison for failing to set up an adequate KYC/anti-money laundering (AML) program at the exchange.
According to FINTRAC, Binance failed to register as a foreign money services business despite being provided with “several opportunities” to do so.
The regulator also discovered that, between June 1, 2021 and July 19, 2023, Binance failed to report 5,902 crypto transactions exceeding $10,000 and their associated know-your-customer (KYC) information.
FINTRAC identified these violations using blockchain explorer tools.
Other Problems for Binance
The Canadian fine is the latest in a string of regulatory actions against Binance.
Just six months prior, the exchange agreed to pay U.S. regulators a staggering $4.3 billion fine for violating U.S. anti-money laundering laws.
Last week, former Binance CEO and co-founder Changpeng “CZ” Zhao was sentenced to four months in U.S. prison for failing to establish an adequate KYC/anti-money laundering (AML) program at the exchange.
Binance is also facing legal challenges in Nigeria, where it has been accused of taking Nigerian naira and charged with money laundering and tax evasion. An American Binance executive, Tigran Gambaryan, the head of financial compliance for the exchange, was arrested in February and charged with the same crimes.
In response to Gambaryan’s arrest, current Binance CEO Richard Teng called on the Nigerian government to release the executive. Teng also revealed in a blog post that, back in January before Gambaryan’s arrest, “unknown persons” had requested a “significant payment in cryptocurrency” to make the charges go away. The New York Times reported that the requested bribe amounted to $150 million.
The regulatory actions against Binance highlight the increasing scrutiny faced by cryptocurrency exchanges as governments and financial regulators worldwide seek to combat money laundering, terrorim financing, and other illicit activities facilitated by digital assets.
The failure to comply with KYC and AML regulations has been a common theme among the charges leveled against Binance.
