Canada’s FINTRAC Fines Binance $4.4 Million for AML Violations and Operating Without a License
In a significant regulatory action, Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) has imposed a $4.4 million fine on the cryptocurrency exchange Binance. This decision comes after a detailed investigation into the platform's compliance with Anti-Money Laundering (AML) regulations and its failure to operate with a requisite foreign money services business (FMSB) license.
During an inspection conducted in 2023, FINTRAC discovered that Binance was operating in Canada without the necessary FMSB license. Despite being given multiple opportunities to register as an FMSB, Binance failed to comply within the legal deadlines.
Furthermore, the investigation revealed that Binance had not reported transactions involving virtual currency over the threshold of 10,000 CAD (approximately $7,300). Authorities identified a total of 5,902 such transactions that were not reported to Canadian authorities, thus violating AML mandates.
On May 7, 2024, FINTRAC officially penalized Binance Holdings Ltd for breaching AML legislation and operating without a license. As of the publication of this article, the company has not commented on FINTRAC’s decision.
It is important to note that back in 2022, Binance had committed to exit the Canadian market and shut down its local branches. This decision was in response to new registration and control rules introduced in the country for cryptocurrency companies.
Despite its exit, financial regulators have continued to monitor the company's activities within their jurisdiction. In 2023, it was reported that the Ontario Securities Commission (OSC) was conducting an investigation into Binance.
This enforcement action by FINTRAC underscores the increasing scrutiny and regulatory challenges faced by cryptocurrency platforms globally. As regulatory landscapes evolve, companies like Binance will need to ensure they are compliant with the legal standards set forth by financial authorities to avoid similar punitive measures.
