Canada imposes a hefty fine on Binance for regulatory non-compliance, signalling a stringent stance on anti-money laundering rules in the crypto space
Compliance Breach: Binance’s Failure to Uphold Anti-Money Laundering Rules
Binance is fined for its non-compliance with Canadian regulations, highlighting challenges in meeting stringent regulatory standards.
Binance, the renowned cryptocurrency exchange, has incurred a substantial fine of $4.4 million CAD from the Canadian government for contravening the country’s anti-money laundering regulations. The penalty, announced by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), underscores the importance of regulatory adherence in the crypto sphere.
According to FINTRAC, Binance failed to fulfil the necessary registrations and regulatory requirements to operate as a foreign money services business (FMSB) in Canada. Additionally, the exchange neglected to report large virtual currency transactions exceeding $10,000 CAD, totalling 5,902 transactions between June 1, 2021, and July 19, 2023.
This latest fine adds to Binance’s ongoing legal battles worldwide, indicative of the mounting regulatory pressures faced by the exchange. Notably, just weeks before this penalty, Binance’s co-founder, Changpeng Zhao (CZ), received a four-month prison sentence for inadequacies in implementing know-your-customer (KYC) and anti-money laundering (AML) protocols. Read More: Ex-Binance CEO Changpeng Zhao Receives Four-Month Prison Sentence
Binance’s Legal Conundrum: Global Litigation Challenges
The exchange grapples with a myriad of legal challenges, including a lawsuit from the US Securities and Exchange Commission (SEC) and an executive detention issue in Nigeria.
Binance’s entanglement with regulatory authorities extends beyond Canada. The company is embroiled in a lawsuit with the SEC over the listing of alleged securities on its platform. Moreover, its current CEO, Richard Teng, is engaged in a battle with the Nigerian government to secure the release of a detained executive, underscoring the multifaceted legal predicaments faced by the exchange.
Despite its global stature, Binance has faced setbacks in Canada, leading to the closure of its operations in response to regulatory hurdles. Meanwhile, competitors like Coinbase have secured licenses to operate fully in the country, highlighting the importance of regulatory compliance for sustained market presence and growth.
Also Read: Coinbase Secures Top Spot as Canada’s Biggest Registered Crypto Exchange
