Crypto exchange Binance is facing a $4.3 million USD fine from FINTRAC in Canada for violating terrorist financing and money laundering laws, as announced by the Canadian regulator. Binance will have to pay $6,002,000 CAD in penalties for failing to register as a foreign money services business and for not reporting cryptocurrency transactions of $10,000 or more within a single payment. Between June 2021 and July 2023, Binance did not report single transactions over $10,000 on 5,902 occasions, according to FINTRAC.
The regulator also stated that Binance had multiple opportunities to register as a foreign money services business but failed to do so within the provided deadlines. FINTRAC emphasized that Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is important for protecting the safety of Canadians and the security of the country’s economy. The Director and CEO of FINTRAC, Sarah Paquet, highlighted the importance of working with businesses to help them understand and comply with their obligations under the Act.
Binance has been at the center of various cryptocurrency regulatory actions recently. Former CEO Changpeng ‘CZ’ Zhao was sentenced to four months in federal prison for money laundering charges. Binance announced last year the rescission of all Canadian services due to stablecoin guidance and limits to crypto exchange investors in the country. The company also closed operations in Nigeria after two Binance executives were arrested for the company’s digital asset operations within the African nation.
In Nigeria, officials have accused Binance of manipulating the country’s currency, the naira, which led to economic instability. Central Bank of Nigeria Governor Olayemi Cardoso claimed that $26 billion had passed through the country via Binance in 2023 from unidentified sources and users. The regulatory scrutiny faced by Binance in Nigeria and the US, along with the recent charges in Canada, could indicate increasing international pressure on the company amid a series of high-profile enforcement actions globally.
The cryptocurrency industry is entering a new phase where compliance with regulations is becoming increasingly important. Binance’s involvement in money laundering and terrorist financing violations has drawn significant attention from regulators worldwide. The actions taken against the exchange in Canada, Nigeria, and the US highlight the need for stricter oversight and enforcement measures to ensure the integrity of the financial system and protect investors from potential risks associated with unregulated activities in the crypto market. Binance and other cryptocurrency exchanges will need to enhance their compliance efforts and adhere to regulatory requirements to avoid further penalties and legal consequences.
