FINTRAC Fines Binance $6M for Anti-Money Laundering Violations

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) recently announced it has imposed a $6,002,000 administrative monetary penalty on Binance Holdings Limited for violating Canadian anti-money laundering laws.

FINTRAC found that the global cryptocurrency exchange committed two violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations:

1. Failure to register with FINTRAC as a foreign money services business operating in Canada.
2. Failure to report large virtual currency transactions over $10,000 to FINTRAC, along with required transaction details.

"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," stated FINTRAC Director and CEO Sarah Paquet. "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."

As Canada's financial intelligence unit, FINTRAC oversees compliance by financial institutions, money services businesses, casinos and others with anti-money laundering and counter-terrorist financing regulations. Reporting of large cash, virtual currency and cross-border electronic fund transfers is critical for FINTRAC's analysis and disclosure of actionable intelligence to law enforcement.

The penalty imposed on Binance Holdings Limited, one of the world's largest cryptocurrency exchanges, represents FINTRAC's largest-ever administrative monetary penalty against a money services business. It stems from the company's unregistered operations in Canada and failure to report details on large cryptocurrency transactions.

Under the legislation, FINTRAC can levy penalties aimed at correcting non-compliant behavior by businesses, rather than punishment. In fiscal 2023-24, FINTRAC issued 12 violation notices totaling over $26 million in penalties across sectors.

Cryptocurrency firms have faced increased scrutiny from FINTRAC and international regulators in recent years over anti-money laundering compliance deficiencies. The penalty demonstrates FINTRAC's willingness to take enforcement action to uphold Canada's anti-money laundering regime as the crypto industry rapidly grows.

Binance has the opportunity to review and respond to FINTRAC's findings before the penalty is finalized. The company has not yet issued a public statement regarding the penalty notice.

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