Binance Hit with $6 Million CAD Fine from Canada’s Anti-Money Laundering Agency
Binance, the world’s largest cryptocurrency exchange, has been slapped with a hefty $6 million CAD fine by Canada’s anti-money laundering agency, FINTRAC. This penalty comes on the heels of an Ontario court certifying a class action lawsuit against the firm.
FINTRAC found that Binance had committed two violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The agency claimed that Binance failed to register as a foreign money services business and neglected to report large virtual currency transactions.
Despite this significant penalty, it pales in comparison to the $4.3 billion USD settlement that Binance recently agreed to pay in the US for evading anti-money laundering laws. The company’s founder and former CEO, Changpeng Zhao, also known as ‘CZ,’ was sentenced to four months in prison earlier this month.
The class-action lawsuit in Ontario alleges that Binance sold crypto derivative products to retail investors without proper registration, violating provincial and federal laws. While Binance initially pulled out of Ontario in 2021 due to regulatory crackdowns, it continued to operate in Canada and even incorporated in Alberta in 2022.
This marks the first monetary penalty that FINTRAC has imposed on a crypto platform, signaling a crackdown on money laundering in the industry. Canadian banks are also facing challenges in curbing money laundering, with TD Bank under scrutiny in the US for its ties to a criminal operation.
As regulators tighten the rules for crypto trading platforms, companies like Binance are being held accountable for their compliance with anti-money laundering laws. The financial intelligence agency analyzed blockchain data and found thousands of unreported transactions by Binance, leading to this significant penalty.
Overall, this fine serves as a warning to crypto firms and financial institutions alike that compliance with anti-money laundering regulations is crucial in today’s evolving financial landscape.