In a recent enforcement action that highlights ongoing regulatory challenges for crypto exchanges, Binance has been fined C$6 million ($4.3 million) for breaches of the nation’s financial regulations. FINTRAC, tasked with overseeing compliance within the financial sector, cited Binance for failing to register as a foreign money services business and neglecting to report nearly 6,000 cryptocurrency transactions valued over $10,000, along with their associated know-your-customer (KYC) information.
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 press release (link)
The violations, which spanned from June 1, 2021, to July 19, 2023, were detected using advanced blockchain analysis tools, underscoring the increasing sophistication of regulatory technology used to monitor the fast-evolving crypto space. This fine is part of a broader series of regulatory challenges Binance faces, including a massive $4.3 billion settlement with U.S. authorities in November 2023 over anti-money laundering law violations and the recent sentencing of its former CEO, Changpeng Zhao, to four months in prison.
Furthermore, Binance is combating allegations of market manipulation linked to $300 million worth of wash trades purportedly conducted by a prominent client. In response, Binance has highlighted its efforts to enforce compliance, noting the offboarding of nearly 355,000 users responsible for over $2.5 trillion in transactions that violated its terms of use.
This case in Canada reinforces the global crackdown on regulatory compliance in the crypto industry and serves as a stern reminder for crypto exchanges about the importance of adhering to international financial regulations.
