Binance, a leading cryptocurrency exchange, has filed an appeal against a $4.4 million fine imposed by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) in May 2023. Despite announcing plans to exit the Canadian market, the exchange faces ongoing regulatory challenges.
Details of the Appeal
On June 5, Binance Holdings Limited submitted a notice of statutory appeal to Canada’s Federal Court. The appeal contests FINTRAC’s allegations of noncompliance with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. FINTRAC fined Binance over 6 million CAD (approximately $4.4 million) for failing to register as a foreign money services business and not reporting digital currency transactions exceeding $10,000.
In its appeal, Binance argued that it did not target Canadian residents with its services. The exchange had already announced its decision to exit the Canadian market in May 2023, citing the challenging regulatory environment.
Broader Legal Context
The FINTRAC fine is just one of several legal issues Binance is dealing with globally. In November 2023, Binance settled with U.S. authorities for $4.3 billion, a resolution that required former CEO Changpeng Zhao to step down. Zhao also pleaded guilty to a felony charge and is currently serving a four-month prison sentence.
Also Read: Nigeria Drops Tax Charges; Money Laundering Case Continues
In another case, Nigerian authorities detained two Binance executives in February on charges of tax evasion and money laundering. Nadeem Anjarwalla, a British and Kenyan national, escaped custody and fled to Kenya, while Tigran Gambaryan, a former U.S. Internal Revenue Service special agent, contracted malaria during his detainment in Nigeria.
Implications for Binance
Binance’s legal battles reflect the broader regulatory scrutiny the cryptocurrency industry faces. As governments and financial authorities tighten regulations, exchanges like Binance must navigate complex legal landscapes in multiple jurisdictions. The outcome of Binance’s appeal in Canada could have significant implications for its operations and regulatory strategy worldwide.
