Principal Learnings:
- AML infractions have cost Binance Holdings Ltd. $4.4 million in fines from FINTRAC.
- Not Having a License: Binance was not having a Foreign Money Services Business (FMSB) license.
- Unreported Transactions: Binance neglected to record over 5,902 virtual currency transactions valued at more than 10,000 Canadian dollars ($7,300).
- Binance had earlier pledged to withdraw from the Canadian market in 2022 because of more stringent laws.
- The Ontario Securities Commission (OSC) is still looking into Binance.
Binance fined $4.4 million by Fintrac for AML infractions
Salutations to all my pals. I’m bringing you this significant update regarding Binance’s most recent issues with Canadian authorities.
For operating without a Foreign Money Services Business (FMSB) licence and for breaking Anti-Money Laundering (AML) laws, Binance Holdings Ltd. has been fined $4.4 million by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
The Lookback
Twenty-three years later, FINTRAC looked into Binance’s adherence to Canadian laws. They found that Binance was not holding the necessary license to operate as an international financial services provider. Despite several chances the regulatory body had offered Binance to register as an FMSB, the exchange did not do so in the legally required time limit.
Furthermore, according to FINTRAC, Binance had not notified to Canadian authorities as required over 5,902 virtual currency transactions surpassing 10,000 CAD ($7,300). The heavy penalty resulted from this major lapse.
Official Decision and Penalty
FINTRAC fined Binance Holdings Ltd. $4.4 million formally on May 7, 2024, for breaking AML rules and operating without a license. Binance hasn’t yet addressed FINTRAC’s ruling as of this writing.
Earlier Plans to Leave Canada
It is noteworthy that Binance had already promised to leave the Canadian market and close its local offices in 2022 after the nation imposed new registration and regulatory standards on cryptocurrency businesses.
Financial authorities did, however, keep an eye on Binance’s operations inside their borders even after the business left. It became known in 2023 that Binance was being looked into by the Ontario Securities Commission (OSC).
What Does the Sector Need to Know About This?
A sobering reminder of the growing scrutiny cryptocurrency exchanges encounter worldwide is provided by the Binance case. Legal analysts think that this penalty might establish a standard for further stringent regulation of unregistered cryptocurrency companies.
Conclusion
I beg every exchange to follow local laws and treat compliance seriously. This is a turning point that might determine how the cryptocurrency business develops, particularly for Binance and its CEO Changpeng Zhao.
Keep watchful, my buddies!
