On Thursday, May 9th, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposed a hefty fine on Binance for violating the country’s laws. The financial regulators demanded that Binance pay an administrative fine of $4.4 million for contravening Canadian anti-money laundering (AML) and terrorist finance regulations. 

The FINTRAC accused Binance of operating as an unregistered foreign money service operator in the region. The regulators claimed to have issued several notices to the crypto exchange to register as a foreign money operator with the Canadian intelligence body. 

Binance hit by $4.4M fine for violating Canadian law

 The regulators claimed that the Binance team still needed to complete the regulatory requirements even after extending the registration deadline. The regulator was given up to September 25th, 2023, to register as FMSB. After failing to register as FMSB, the regulators carefully monitored Binance’s operations.

 According to the financial law, businesses operating in Canada must report any transaction exceeding $10,000. The regulators noted that from June 2021 to July 19th, 2023, Binance failed to report over 5902 crypto transactions valued at $10,000 to the relevant authority. 

Based on the severity of the case, FINTRAC fined Binance 6,002,000 CAD, equivalent to $4.4 million. The Binance team departed the Canadian market in May due to non-compliance, citing heightened regulatory pressure. Apart from Canada, the Binance team has exited the Cyprus and Netherlands markets for failing to conform to the law.

Regulatory fines on Binance

Also, the Binance team has been facing intense regulatory scrutiny in Thailand, Nigeria, and the United States. Earlier last week, the Nigerian court scheduled May 17th for the sentencing of two Binance officials for engaging in money laundering activities. 

In July last year, as the regulatory pressure escalated, Binance faced a leadership shakeup that led to the departure of core team players. Around ten top-level managers stepped down from their roles in Binance. The sudden departure of Binance officials led to a significant layoff, impacting hundreds of employees.

The Binance spokesperson confessed that the changes in the Binance organization structure aimed to reduce operational costs ahead of the next bull run. 

In another incident, in November 2023, Changpeng Zhao, Binance’s boss, faced legal charges for money laundering involvement. The court ordered Zhao to step down for further investigation. The court also imposed a $4.3 billion penalty on Binance and Zhao for violating U.S. federal laws.

After a lengthy court proceeding, the judge ordered Zhao to serve four months in prison for his involvement in money laundering and terrorist financing.

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