Binance, the world’s largest cryptocurrency exchange, faces mounting regulatory woes as Canada’s financial regulator, FINTRAC, imposes a hefty fine of C$6 million ($4.4 million). The penalty stems from alleged violations related to anti-money laundering (AML) protections, particularly concerning failure to register as a foreign money services business and report virtual currency transactions.
According to FINTRAC, Binance committed two administrative breaches. Firstly, the exchange purportedly neglected to register with FINTRAC as required for foreign money services businesses. Secondly, it allegedly failed to report large virtual currency transactions exceeding $10,000, along with mandated information. As a consequence, financial penalties were levied against the exchange.
Sarah Paquet, Director and CEO of FINTRAC, underscored the agency’s dedication to aiding businesses in understanding and fulfilling their obligations. Paquet emphasized that appropriate measures would be taken to ensure compliance within the industry, highlighting Canada’s robust anti-money laundering and anti-terrorist financing regime.
The regulator asserts that Binance had ample opportunities to comply with registration requirements but allegedly failed to do so within stipulated deadlines. Until its cessation of operations in Canada on September 25th, 2023, Binance was obligated to register with FINTRAC. During this period, the exchange purportedly violated registration mandates.
Utilizing blockchain analytics, FINTRAC identified over 5,902 instances where Binance purportedly failed to report transactions exceeding $10,000 in virtual currency. Such omissions contravene Canadian laws governing money laundering and terrorist financing.
Despite facing increased regulatory scrutiny, Binance expresses commitment to enhancing compliance. This includes appointing a new board of directors under CEO Richard Teng, who succeeded former CEO Changpeng Zhao. Zhao, meanwhile, has been sentenced to four months in prison.
In response to regulatory demands, Binance plans to establish a headquarters to meet requirements for a physical presence and bolster organizational structure. Despite these challenges, Binance’s native token, BNB, has seen significant growth, reaching $598 amidst a 1.4% price surge in the last 24 hours.
