Binance Fined $4.3 Million for Violating Anti-Money Laundering Laws in Canada

Binance, the world's largest cryptocurrency exchange, has been fined $4.4 million by Canadian regulators for violating anti-money laundering laws. The fine comes after Binance faced similar legal challenges in the US, where it was fined $4.3 billion and its former CEO received a prison sentence.

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Nitish Verma
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Binance Fined $4.3 Million for Violating Anti-Money Laundering Laws in Canada

Binance Fined $4.3 Million for Violating Anti-Money Laundering Laws in Canada

Binance, the world's largest cryptocurrency exchange, has been fined $4.3 million CAD ($4.4 million USD) by Canadian regulators for violating anti-money laundering laws. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) found that Binance failed to register as a foreign money services business and neglected to report nearly 6,000 transactions above $10,000 CAD between June 1, 2021, and July 19, 2023.

Why this matters: The fines and legal challenges faced by Binance highlight the importance of cryptocurrency exchanges adhering to anti-money laundering laws and regulations to prevent illicit activities. Failure to comply can have significant consequences, including enabling criminal activity and undermining trust in the financial system.

This penalty comes on the heels of Binance's $4.3 billion fine in the US for breaching anti-money laundering laws. Additionally, former CEO Changpeng "CZ" Zhao received a four-month prison sentence in the US for inadequate Know-Your-Customer (KYC) and Anti-Money Laundering (AML) compliance. The fines and legal challenges highlight the importance of cryptocurrency exchanges adhering to anti-money laundering laws and regulations to prevent illicit activities.

Binance's violations primarily revolved around its failure to comply with regulations and registrations related to operating as a foreign money services business (FMSB) and its failure to report large virtual currency transactions. The fine imposed by Canada coincidentally amounts to roughly $4.4 million USD, continuing a trend of penalties against Binance associated with the number '4'.

As part of the $4.3 billion settlement with US authorities in November 2023, Binance admitted to violating US anti-money laundering rules and trading sanctions. The Department of Justice selected consulting firm Forensic Risk Alliance (FRA) as an external observer to monitor Binance's compliance with the plea agreement for three years. FRA will have access to Binance's internal records, facilities, and employees to report on the company's activities to the government.

Binance is also facing legal challenges in Nigeria, where it is accused of money laundering and tax evasion. An executive has been detained for similar charges. Due to its inability to meet the nation's regulatory requirements, Binance has ceased operations in Canada. The company is currently awaiting a ruling on a joint motion to dismiss, which contends that a US DOJ filing in the Mango Markets lawsuit contradicts the SEC's position that BUSD and other stablecoins are unregistered securities.