tl;dr
Binance, a global cryptocurrency exchange, has challenged a $4.4 million fine imposed by Canada's FINTRAC for alleged anti-money laundering and terrorism financing regulation violations. The appeal was filed in Canada's Federal Court on June 5, contending that Binance's services were not aimed at Ca...
Binance Challenges Canadian Fine and Faces Legal Battles
Binance, a global cryptocurrency exchange, has challenged a $4.4 million fine imposed by Canada's FINTRAC for alleged anti-money laundering and terrorism financing regulation violations. The appeal was filed in Canada's Federal Court, contending that Binance's services were not aimed at Canadian residents and announcing plans to exit the Canadian market by May 2023 due to regulatory challenges.
Binance's compliance issues have also drawn attention in the U.S. and other jurisdictions, resulting in significant legal battles and regulatory oversight. Furthermore, the company faced operational challenges, including the detention of its executives in Nigeria on tax evasion and money laundering charges, which were later dismissed by Nigeria's Federal Inland Revenue Service.
Binance, a global cryptocurrency exchange, has formally challenged a $4.4 million fine levied by Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC). The fine, imposed in May, accuses Binance of failing to adhere to anti-money laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. The appeal was lodged on June 5 in Canada’s Federal Court.
The action by FINTRAC highlights alleged shortcomings in Binance’s operations, specifically their failure to register as a foreign money services business and to report transactions exceeding $10,000. In its appeal, Binance contends that its services were not targeted at Canadian residents. Moreover, the company declared its intent to exit the Canadian market in May 2023, citing the challenging regulatory climate as a critical reason for its decision.
Binance’s regulatory challenges extend beyond Canadian borders. The exchange recently settled a significant legal battle in the United States by agreeing to a $4.3 billion settlement with U.S. authorities. This settlement followed allegations similar to those made by FINTRAC and required Changpeng Zhao, the then-CEO, to resign after pleading guilty to a felony charge. Zhao is currently serving a four-month federal prison sentence. Further complicating matters, the U.S. Department of Justice appointed the Forensic Risk Alliance to oversee Binance’s compliance measures for the next three years. This decision came after a controversial deliberation that saw Sullivan & Cromwell, a law firm entangled in the FTX collapse, lose the monitoring role.
In addition to its legal and regulatory hurdles, Binance continues to face operational challenges. Earlier this year, two of its executives were detained in Nigeria on tax evasion and money laundering charges. This incident further complicates the company’s global operations and efforts to maintain a clean regulatory slate. However, Nigeria’s Federal Inland Revenue Service (FIRS) dismissed the charges against the exchange last week, leading to Binance securing a big win in Nigeria.