Canadian regulator fines Binance $4.4M for AML and CFT violations

FINTRAC reported that Binance facilitated 5,902 separate transactions of $10,000 or more in crypto from June 2021 to July 2023 and failed to register with the regulator.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced it was imposing a $4.4 million administrative monetary penalty on Binance for failing to register and report large transactions in digital assets.

In a May 9 notice, FINTRAC said it had imposed penalties on Binance Holdings Limited for noncompliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. According to the regulator, Binance failed to register as a foreign money services business and report digital currency transactions that exceeded $10,000.

FINTRAC said it had fined Binance 6,002,000 CAD, or roughly $4.4 million at the time of publication. The regulator reported that Binances activities for incurring the fine happened in 2023 when it was winding down its operations in Canada. Cointelegraph reached out to Binance for comment but did not receive a response at the time of publication.

Source: FINTRAC

Binance announced in May 2023 that it planned to leave the Canadian market, citing regulatory concerns. FINTRAC reported 5,902 separate transactions of $10,000 or more in crypto on the exchange from June 2021 to July 2023.

“Binance Holdings Limited was provided with several opportunities to register with FINTRAC as an FMSB, however, they had not completed their registration by the deadlines provided,” said FINTRAC. “It should be noted that Binance Holdings Limited was deemed to be an FMSB and was required to be registered with FINTRAC up until September 25th, 2023, when it officially ceased all operations in Canada. Up until that day, Binance Holdings Limited was in violation of its registration requirements.”

Related: Canada to begin implementing international crypto tax reporting standard

The $4.4 million penalty was separate from legal entanglements Binance has faced or is currently facing in other jurisdictions. In November 2023, the company settled with authorities in the United States, requiring it to pay $4.3 billion in penalties. Changpeng Zhao stepped down as CEO as part of the deal and pleaded guilty to one felony charge. He was subsequently sentenced to four months in prison.

In Nigeria, two Binance executives were arrested in February and face tax evasion and money laundering charges. Though one of the men reportedly escaped to Kenya, Interpol suggested it was ready to extradite him to Nigeria, where court proceedings are expected to resume on May 17.