Major crypto firm fined millions for unreported transactions

In this post:

  • Crypto exchange fined $4.4M for not registering and reporting large transactions.
  • Exchange failed to comply with AML/CFT rules despite multiple chances.
  • CEO pleaded guilty and got jail time in a separate settlement over compliance issues.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced that the body had charged an administrative monetary penalty (AMP) of $4.4 million administrative monetary penalties to Binance as it failed to register and report large transactions in digital assets.

Massive penalty for AML violations

In a May 9 notice, FINTRAC indicated that it applied a penalty against Binance Holdings Ltd. due to noncompliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. The regulator’s statement admits the Binance entity’s serious misconduct, such as failing to register as a foreign money services business and also ignoring and failing to disclose the appropriate financial transactions.

FINTRAC charged Binance 6,002,000 CAD, approximately $4.4 million. The regulator reported that having to pay the penalty product of Binance’s actions happened in 2023, at the time the exchange was getting shut down in Canada. The announcement from Binance through Twitter on May 2023 claimed that regulatory issues in Canada were behind the move. FINTRAC data indicates there have been 5,902 separate crypto dealings with the exchanges worth at least $10,000 each from June 2021 to July 2023.

It is stated that Binance Holdings Limited was furnished numerous times to register with FINTRAC as an FMSB; however, they did not complete their registration process by the dates provided by FINTRAC. Notably, before 25 September 2023, Binance Holdings Limited had already been recognized as a foreign money service provider and was required to register with the Financial Transactions and Reports Analysis Centre of Canada. Those compliance requirements could no longer be fulfilled after the mentioned date arrived, and Binance Holdings Limited company ceased its operations in the Canadian market. 

CEO’s legal troubles deepen

While the $4 million penalty is separate from other legal entanglements or current disputes that Binance has in various jurisdictions worldwide, we are confident that our advanced anti-money laundering systems will ensure that the exchange complies with all regulations. The company eventually conceded in November 2023 by having to pay $4.3 billion in penalties.  

Changpeng Zhao resigned from the company as part of the deal and pleaded guilty to one crime. In the last status hearing, he received a four-month jail term.

In February, the legal authorities in Nigeria welcomed two Binance managers accused of tax evasion and money laundering. Interpol is, however, said to be on a mission to work with policemen in Kenya in case the lawful investigations from Nigeria indicate that the suspect managed to escape to Kenya. Finally, they expect to extradite him to Nigeria, where the court proceedings will resume on May 17th.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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