Binance Appeals $4.4M Fine By Canadian Regulator Over AML and CFT Violations

Highlights:

• Binance has filed an appeal against a $4.4M fine from a Canadian regulator for alleged non-compliance with AML and CFT regulations.
• The crypto exchange asserts that it did not intentionally target Canadian residents with its services.
• Binance faces legal challenges globally, including a $4.3B US settlement and Nigerian executives’ detention.

Binance, the world’s leading cryptocurrency exchange, has filed an appeal for a $4.4 million fine levied by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The fine, imposed in May, accuses Binance of failing to comply with Countering the Financing of Terrorism (CFT) and Anti-Money Laundering (AML) regulations. Binance Holdings Limited lodged a statutory appeal in Canada’s Federal Court system on June 5 against the FINTRAC director, contesting allegations of violating AML and CFT rules.

Canadian Regulator Fines Binance $4.4M

On May 9, the Canadian regulator announced a fine of over 6 million CAD (approximately $4.4 million) imposed on Binance. FINTRAC cited the exchange’s failure to register as a foreign money services business and report digital currency transactions exceeding $10,000 as reasons for the penalty. The regulator said the exchange was fined for its actions in 2023 when it was reducing its operations in Canada. 

During an investigation using blockchain analysis tools, FINTRAC found that the exchange failed to report transactions multiple times from June 1, 2021, to July 19, 2023. The regulator said, “Binance Holdings Limited was provided with several opportunities to register with FINTRAC as an FMSB, however, they had not completed their registration by the deadlines provided. It should be noted that Binance Holdings Limited was deemed to be an FMSB and was required to be registered with FINTRAC up until September 25th, 2023.”

#FINTRAC has imposed an administrative monetary penalty of $6,002,000 on Binance Holdings Limited, a foreign money services business. For more information, consult the Centre’s website: https://t.co/x7KF5M3s2v pic.twitter.com/slFic4gJWo

— FINTRAC_Canada (@FINTRAC_Canada) May 9, 2024

Binance Appeals Allegations, Denies Targeting Canadian Market

According to Bloomberg’s report, Binance argues in its appeal that it did not deliberately target Canadian residents and considers its participation in the Canadian market as incidental to its global operations. The company stated that it had attempted to establish operations in Canada, but ultimately, these efforts did not materialize. Furthermore, the company announced its plan to exit from the Canadian market in May 2023, citing regulatory concerns.

Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.

We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users.…

— Binance (@binance) May 12, 2023

Crypto Exchange Faces Legal Challenges Across Multiple Countries

In November of last year, the company agreed to a $4.3 billion settlement with US authorities, leading to the resignation of then-CEO Changpeng Zhao. Zhao pleaded guilty to one felony charge and is currently serving a four-month sentence in federal prison. 

Moreover, in February, Nigerian authorities detained two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla. The detention followed allegations of tax evasion and money laundering at the company. This incident adds further complexity to the company’s global operations and its efforts to uphold a clean regulatory record. However, Nigeria’s Federal Inland Revenue Service (FIRS) dropped the charges against the exchange last week, marking a significant victory for Binance in Nigeria.

#Nigeria Drops Tax Charges Against #Binance Executives

Tax charges brought by the Federal Inland Revenue Service (FIRS) of Nigeria against Binance executives Tigran Gambaryan and Nadeem Anjarwalla have been dropped.

The FIRS agreed to revise the charges so that only the crypto… pic.twitter.com/YrY07cvTnx

— EchoeWeb (@Echoeweb) June 14, 2024

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Disclaimer: Cryptocurrency is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.