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Canada imposes a $4.38 million fine on Binance for breaching money laundering regulations.

The exchange failed to register as a foreign money services business and did not report large virtual currency transactions.

Canada’s cryptocurrency platform Binance faces a hefty fine of nearly CAD 6 million ($4.38 million) from FINTRAC, Canada‚Äôs anti-money laundering agency, for flouting money laundering and terrorist financing laws. Despite multiple deadlines, Binance failed to register as a foreign money services business with FINTRAC and neglected to report receiving virtual currency worth 10,000 or more on 5,902 occasions between June 1, 2021, and July 19, 2023.

This legal action follows the former CEO Changpeng Zhao’s recent sentencing to four months in prison for violating US money laundering laws. Binance agreed to pay a colossal penalty of $4.32 billion, with Zhao himself facing a $50 million criminal fine and an additional $50 million to the US Commodity Futures Trading Commission.

Despite ceasing operations in Canada last year, Binance remains accountable for compliance during its active tenure.

Why does it matter?

The persistent scrutiny and legal repercussions faced by Binance highlight the growing global regulatory pressure on the cryptocurrency sphere. Governments and financial institutions globally are prioritizing stringent anti-money laundering measures to combat illicit financial activities like money laundering and terrorist financing within the cryptocurrency realm.

While cryptocurrencies offer advantages such as decentralization and ease of cross-border transactions, they also pose regulatory challenges. Binance’s fines and legal ramifications serve as a cautionary tale for other crypto exchanges and entities, emphasizing the importance of adhering to robust compliance standards.

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