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FINTRAC Fines Binance $6M CAD for Compliance Failures

Enforcement | May 12, 2024

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Binance Faces $6M CAD Fine for Compliance Failures in Canada

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has fine Binance Holdings Limited $6M CAD for failing to adhere to Canada's financial regulations.  This fine is part of broader regulatory scrutiny that has seen Binance face legal challenges in several jurisdictions, including a significant $4.3 billion settlement with U.S. regulators for similar compliance failures.

See:  Canadian Investors Lead Class Action Against Binance Canada

The two violations that led to Binance being fined C$6 million by FINTRAC are:

  1. Binance did not register as a foreign money services business (FMSB) with FINTRAC, despite being given multiple opportunities to do so. This registration is crucial for entities engaging in money services within Canada to ensure compliance with the country's financial regulatory framework​.
  2. Binance failed to report 5,902 cryptocurrency transactions that each exceeded C$10,000, along with their necessary Know Your Customer (KYC) information. Such reports are mandatory under Canadian financial laws to monitor and prevent illegal activities such as money laundering​.

These breaches reflect issues with compliance and regulatory adherence by Binance in the Canadian financial environment.  More details can be found on the FINTRAC penalties page here.

Sarah Paquet, Director and Chief Executive Officer, Financial Transactions and Reports Analysis Centre of Canada:

“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.”

Conclusion

Apart from Canada, Binance also faces legal issues in countries such as Nigeria and continues to be involved in investigations and lawsuits that could affect global regulatory frameworks for digital assets.  Also see:  Philippines SEC Blocks Binance for Failing to Secure License.

See:  SEC Enforcement Director Grewal On Crypto Regulation

These regulatory actions have a noticeable impact on Binance's operations, including its decision to exit certain markets like Canada, reflecting how regulatory pressures can influence business strategies.


NCFA Jan 2018 resize - FINTRAC Fines Binance $6M CAD for Compliance FailuresThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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