Canadian financial regulator fines Binance 6 million CAD over money laundering violations
Quick Take
- Canadian financial regulator FINTRAC fined Binance $4.4 million for two alleged violations.
- FINTRAC said the firm failed to register as a foreign moeny services business and failed to report a virtual currency transaction surpassing $10,000 in a single trade.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) issued a regulatory action against the crypto exchange giant Binance for allegedly violating money laundering rules.
The regulator cited two violations: failing to register as a foreign money services business with FINTRAC and failing to report a virtual currency transaction surpassing $10,000 in a single trade.
"Binance Holdings Limited, also operating as Binance Holdings (IE) Ltd., Binance.com, Binance Global, and Binance, is determined to be a foreign money services business. Binance Holdings Limited was imposed an administrative monetary penalty of $6,002,000 on May 7, 2024, for committing 2 violations. The violations were found during the course of a compliance activity in 2023," FINTRAC wrote in a May 9 release. The USD equivalent to the penalty is around $4.4 million.
FINTRAC is a part of Canada's financial intelligence unit. The regulator aims to detect and prevent money laundering, terrorism financing and other illicit behavior in Canada's financial ecosystem.
"Using blockchain analytics, FINTRAC identified that Binance Holdings Limited failed to report the receipt from a client, of an amount in virtual currency of $10,000 or more in the course of a single transaction, together with the prescribed information that occurred on 5,902 separate occasions during the period of June 1, 2021 until July 19, 2023," the regulator added.
U.S. enforcement action
In November 2023, the United States Department of Justice sought $4 billion in a plea deal from Binance to end a probe related to alleged money laundering, fraud and sanctions violations, The Block previously reported. The deal also included Changpeng 'CZ' Zhao, CEO at the time, stepping down from his position as well as paying a fine of $50 million. Zhao was sentenced to four months in prison in April 2024 after pleading guilty to violating anti-money laundering sanctions regulations.
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