Binance fined $4.4 million in Canada

The Canadian government condemned Binance for violating the country’s anti-money laundering rules last year. According to the decision, the exchange must pay a fine of US$4.4 million for the violations.

According to the ruling, Binance failed to comply with rules and records related to operating as a foreign money services business (FMSB). In other words, the exchange operated in Canada without having the licenses required by the country’s authorities.

Binance receives $4.4 million fine

The Financial Reporting and Transaction Analysis Center of Canada (FINTRAC) opened the case against Binance and announced the fine on Tuesday (7). In its decision, FINTRAC stated:

“Binance Holdings Limited received an administrative monetary penalty of 6 million Canadian dollars (CAD) on May 7, 2024, for committing two violations. These violations occurred in 2023 and went unnoticed until a compliance analysis carried out in the same year”, said the agency.

In addition to not registering as an FMSB, the regulator said that Binance did not report receiving large transactions – worth more than $10,000 CAD. According to the complaint, Binance allegedly failed to report 5,902 such transactions between June 1, 2021 and July 19, 2023.

Interestingly, the new fine arrived just two weeks after the conviction of Binance co-founder and former CEO Changpeng Zhao (CZ) in the United States. CZ received a four-month prison sentence on charges of money laundering and failing to implement an adequate identity verification (KYC) system when he was CEO of Binance.

In November, CZ and Binance pleaded guilty to the charges. They paid fines of $50 million and $4 billion, respectively, as part of a settlement with the US Department of Justice.

Interestingly, this is the second time that Binance has received a “number 4” fine. First there was a fine of US$4 billion in the USA and now in Canada, the value of which corresponds to US$4.4 million based on the exchange rate of the Canadian dollar.

This is a curious fact, as the number 4 had symbolic importance for Binance in the “CZ era”. During his time as CEO, the executive often used the number as a coded message.

In these messages, CZ encouraged followers to reject negative rumors about his company – including those about federal investigations. But it seems that the numbers have now worked against the company.

In fact, Binance’s legal troubles are far from over. The company is currently facing a massive lawsuit from the US Securities and Exchange Commission (SEC) for listing more than a dozen tokens on its platform. In the SEC’s view, these tokens are unregistered securities.

The company’s current CEO, Richard Teng, is also negotiating with the Nigerian government to release one of the Binance executives who has been detained for more than 70 days in the country. In the African country, Binance is accused of market manipulation to destroy the value of the local currency, the naira.