Binance Slapped with $6 Million Fine by Canada's FINTRAC Over AML Failures

Cryptocurrency exchange giant Binance has been hit with a substantial $6 million fine by Canada's FINTRAC due to deficiencies in its anti-money laundering (AML) reporting. The national financial intelligence agency cited Binance's failure to comply with Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act, specifically for not registering as a foreign money services business and for neglecting to report "large virtual currency" transactions exceeding $10,000.

Sarah Paquet, FINTRAC's director and CEO, emphasized the critical role of companies in adhering to AML regulations to safeguard Canadians' safety and the nation's economic security. She reiterated FINTRAC's commitment to assisting businesses in understanding and meeting their obligations under the Act while maintaining firm enforcement measures when necessary. Paquet stated, “FINTRAC will continue to work with businesses to help them understand and comply with their obligations under the Act. We will also be firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed.”

Despite the fine, Binance had yet to respond to requests for comment as of the time of publication. The US-based exchange, known for its high daily trading volumes, has been grappling with various legal and regulatory challenges. In February, it agreed to pay a staggering $4.3 billion fine for repeated AML violations, approved by a judge in Seattle following a settlement with US law enforcement agencies.

Former Binance CEO Changpeng Zhao faced consequences as well, receiving a four-month prison sentence after pleading guilty to money laundering violations, accompanied by substantial fines to regulatory bodies. Zhao's sentence was criticized for its leniency compared to others in the industry, notably Sam Bankman-Fried, who received a 25-year sentence for defrauding customers of his bankrupt FTX exchange. Bankman-Fried is currently appealing his conviction and sentence.

Recently, Binance's legal woes extended to Nigeria, where two executives were detained following policy meetings with Nigerian authorities. The executives are now facing trials in Nigeria on charges of tax evasion and money laundering, with the company challenging the allegations.

The series of legal battles and regulatory scrutiny surrounding Binance underscores the growing challenges faced by cryptocurrency exchanges as authorities worldwide ramp up efforts to combat financial crimes in the digital asset space.

By fLEXI tEAM