As a researcher with a background in finance and experience following the crypto industry closely, I believe that Canada’s decision to fine Binance $4.4 million for violating anti-money laundering rules is a significant development that underscores the increasing regulatory scrutiny of cryptocurrency exchanges. Binance, as the world’s largest crypto exchange, has been under fire for some time due to its lax approach to KYC and AML regulations.
Last year, Binance, the globe’s leading cryptocurrency exchange, was penalized by Canada for violating its anti-money laundering regulations.
According to a recent public announcement made on Thursdays, I, as an analyst, have discovered that Binance has allegedly failed to adhere to the mandatory regulations and requirements for functioning as a Foreign Money Services Business (FMSB) under the jurisdiction of the federal government.
Binance Fined $4.4 Million By Canada
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) wrote:
On May 7, 2024, Binance Holdings Limited was penalized $6,002,000 CAD as a administrative sanction for two infractions. These infringements were identified during regulatory compliance checks conducted in the previous year (2023).
Binance was criticized by the regulatory body for not reporting over 5,900 large virtual currency transactions worth more than $10,000 CAD each, between June 1, 2021, and July 19, 2023. Instead of being registered as a Financial Market Service Business (FMSB), Binance fell short in this compliance aspect.
Two weeks following the imprisonment sentence of Binance’s co-founder and former CEO, Changpeng Zhao (CZ), for neglecting to establish proper know-your-customer (KYC) and anti-money laundering (AML) procedures at their exchange, a penalty was imposed.
In November, the founder along with his organization admitted guilt for breaking Anti-Money Laundering (AML) laws. As a consequence of this admission, they reached an agreement with the US Department of Justice to pay penalties amounting to $50 million and $4 billion separately.
Binance’s Many Legal Troubles
As a crypto investor following the developments in the industry, I’ve noticed an intriguing pattern involving Binance and fines with the number ‘4’. The latest penalty imposed by Canadian authorities amounts to approximately $4.4 million USD. This coincidence is reminiscent of past instances where Binance’s executive, Changpeng Zhao (CZ), has utilized the number ‘4’ in his communications as a subtle nod to downplay any negative rumors surrounding his company, including federal investigations.
Binance’s legal issues continue to mount as they face a significant lawsuit from the Securities and Exchange Commission (SEC), accusing them of listing more than a dozen potential securities without proper registration.
Richard Teng, the CEO of Binance currently, is engaged in a battle with the Nigerian authorities to secure the release of one of the company’s executives who has been held in custody for more than two months.
In Canada, Binance has had to shut down its operations as it failed to comply with the country’s stringent regulatory requirements. Meanwhile, Coinbase, a competing exchange, has recently obtained a full license to legally run its business in Canada.
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2024-05-09 22:55