Binance Faces CAD$6 Million Penalty from Canadian Regulator for Compliance Failures

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada's financial intelligence unit and anti-money laundering and anti-terrorist financing supervisor, has imposed a CAD 6,002,000 (about USD 4,385,135) administrative monetary penalty against Binance, a global crypto trading giant.

FINTRAC stated that Binance failed to register with the regulator as a foreign money services business and did not report the necessary KYC (Know Your Customer) and other required reporting information for 5,902 individual crypto transactions exceeding CAD 10,000 between June 1, 2021, and July 19, 2023.

In addition to this penalty, Binance is also facing a class-action lawsuit in the Superior Court of Ontario, Canada. The plaintiff alleges that the exchange violated local securities laws and sold crypto derivative products to retail investors without proper registration.

Binance has been grappling with regulatory challenges in recent years and has faced crackdowns from multiple watchdogs across the globe, including the United States, Nigeria, India​, and the Philippines. In late 2023, Binance agreed to pay a record-breaking $4.3 billion penalty​​ to settle charges with US regulators.

Furthermore, several Binance executives have been detained or imprisoned in different regions. Most notably, the former CEO and co-founder, CZ Zhao, was sentenced to four months in a US prison for failing to establish a sufficient KYC/anti-money laundering (AML) program at the exchange. Tigran Gambaryan, Binance's compliance executive, was charged with tax evasion and money laundering and was taken into custody by Nigerian authorities in February.