Canada fines Binance $4.38 million for money laundering violations
The exchange failed to register as a foreign money services business and did not report large virtual currency transactions.
Canadian cryptocurrency exchange Binance has been fined nearly CAD 6 million ($4.38 million) by Canada’s anti-money laundering agency, FINTRAC, for violating money laundering and terrorist financing laws. According to FINTRAC, despite several deadlines, Binance failed to register as a foreign money services business with the intelligence body. Additionally, the exchange did not report receiving virtual currency worth 10,000 or more on 5,902 separate occasions between 1 June 2021 and 19 July 2023.
The legal measure against Binance comes after a recent sentencing of the former CEO Changpeng Zhao to four months in prison for violating US money laundering laws. Binance agreed to pay a massive penalty of $4.32 billion, with Zhao also paying a $50 million criminal fine and an additional $50 million to the US Commodity Futures Trading Commission.
Binance’s decision to cease operations in Canada last year does not absolve them of the responsibility to comply with the country’s laws during their active period.
Why does it matter?
The ongoing scrutiny and legal action against Binance underscore the increasing global regulatory pressure on the cryptocurrency industry. Governments and financial institutions worldwide are prioritising the implementation of robust anti-money laundering measures to prevent illicit financial activities, including money laundering and terrorist financing within the cryptocurrency sector.
While cryptocurrencies offer benefits such as decentralisation, anonymity, and ease of cross-border transactions, they also pose challenges in terms of regulation and monitoring. The fines and legal consequences faced by Binance serve as a warning to other exchanges and entities operating in the crypto space to uphold stringent compliance standards.
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The GIP Digital Watch Observatory team, consisting of over 30 digital policy experts from around the world, excels in the fields of research and analysis on digital policy issues. The team is backed by the creative prowess of Creative Lab Diplo and the technical expertise of the Diplo tech team.
