Binance’s regulatory woes continue to mount as the world’s largest cryptocurrency exchange by trading volume has been fined C$6 million ($4.4 million) by Canada’s financial regulator, FINTRAC. 

The penalty was imposed due to Binance’s alleged failure to comply with money-laundering protections, specifically related to registering as a foreign money services business and reporting virtual currency transactions.

According to FINTRAC, Binance committed two administrative violations. Firstly, it is claimed that the exchange failed to register with FINTRAC as a foreign money services business. 

Secondly, Binance failed to report large virtual currency transactions of $10,000 or more, along with the required information, as mandated by regulations. In response to these violations, financial penalties were imposed.

Sarah Paquet, Director and CEO of FINTRAC, emphasized the agency’s commitment to helping businesses understand and comply with their obligations. Paquet also stated that appropriate actions would be taken when necessary to ensure compliance within the industry. Paquet’s statement reads:

Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is in place to protect the safety of Canadians and the security of Canada’s economy. FINTRAC will continue to work with businesses to help them understand and comply with their obligations under the Act. We will also be firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed

According to the regulator, Binance had multiple opportunities to register as a foreign money services business with FINTRAC. However, the exchange allegedly failed to complete the registration within the provided deadlines. 

Notably, until September 25th, 2023, when Binance ceased operations in Canada, the company was obligated to register with FINTRAC. During this period, FINTRAC claims that Binance violated its registration requirements.

Using blockchain analytics, FINTRAC identified that Binance failed to report over 5,902 separate instances of receiving amounts in virtual currency totaling $10,000 or more in a single transaction. 

Such omissions contravene the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

It is noteworthy that despite Binance’s increasing regulatory challenges, the exchange has expressed its commitment to increasing compliance by appointing a new board of directors, led by the recently appointed CEO, Richard Teng. Teng replaced former CEO Changpeng Zhao, who has since been sentenced to four months in prison.

Additionally, in response to growing regulatory requirements, the exchange intends to establish a headquarters. This move aims to address regulators’ demand for a physical presence and a more robust organizational structure.

Amidst these developments, Binance’s native token, BNB, has experienced a significant surge, reaching $598, driven by a 1.4% price increase in the past 24 hours.

Featured image from Shutterstock, chart from TradingView.com 

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