- FINTRAC has imposed a CAD $6 million penalty on Binance for violations of the Proceeds of Crime and Terrorist Financing Act
- Binance has reportedly committed two breaches that led to the fine
- This fine follows a class-action lawsuit filed against Binance for allegedly selling securities without proper authorization
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has imposed a CAD$6 million ($4.3 million) penalty on Binance for Proceeds of Crime and Terrorist Financing Act and its associated regulations. According to FINTRAC, Binance was found to have committed two key violations, leading to the fine. The news comes around three weeks after Binance was hit with a class action lawsuit in the country over the alleged sale of securities following an investigation by the Ontario Securities Commission (OSC).
Binance Failed to Comply
FINTRAC published a press release yesterday where it revealed that Binance had been accused of failing to register as a foreign money services business and not reporting virtual currency transactions over CAD$10,000 in a single transaction, along with recording the required information. The authority says that these lapses highlight Binance’s failure to meet Canada’s rigorous anti-money laundering (AML) and anti-terrorist financing requirements.
The fine of course pales into comparison with the $4.3 billion fine meted out by the US Treasury Department and the US Commodity Futures Trading Commission, but it nevertheless illustrates Binance’s continued compliance issues.
Sarah Paquet, Director and Chief Executive Officer of FINTRAC, reiterated the importance of maintaining compliance, stating in the press release, “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. 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.”
Fine Comes After Class Action Lawsuit
The fine comes in the wake of a class action lawsuit filed in Canada against Binance over alleged securities law violations. Plaintiffs Christopher Lochan and Jeremy Leeder purport to represent Canadian investors harmed by Binance’s alleged unregistered offering of securities, claiming these offerings led to significant financial damages.
In June 2023 it was revealed that the OSC was investigating Binance over the sale of such securities, despite it having quit the country the prior month.
