The crypto exchange Binance has filed an appeal in Canada against the 4.4 million fine imposed by Fintrac.
Reported by Bloomberg citing Canadian Press as the source.
Summary
Canada: The million-dollar fine to the crypto exchange Binance
In May, the Canadian financial markets regulatory authority, Fintrac, had fined the exchange for AML and CFT violations.
The fine imposed was 6 million Canadian dollars (CAD), corresponding to approximately 4.4 million US dollars (USD).
The Canadian regulatory authority has accused Binance of facilitating 5,902 transactions of at least 10,000 CAD, from June 2021 to July 2023, without being registered in their records. Registration would be mandatory to carry out this type of activity in Canada, and thus the accusations have been made.
In the official statement from Fintrac in May, it was stated that the reason for the fine was Binance’s non-compliance in Canada with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and related regulations.
Furthermore, it was reported that the Canadian regulatory authority had found that Binance Holdings Limited had committed some administrative violations, such as the failure to register with FINTRAC itself as a foreign money services business, and the failure to report large virtual currency transactions equal to or greater than $10,000.
Therefore, the exchange was not accused of money laundering, but only of not reporting significant transaction amounts to the Canadian authorities. Although these transactions are not necessarily related to money laundering or terrorism financing, the lack of reporting meant that the authorities could not verify it.
The reaction of Binance
Already in May of last year, Binance had announced its intention to exit the Canadian market precisely due to regulatory concerns.
However, Fintrac previously pointed out that the company had several opportunities to register in Canada in order to operate legally, but it did not complete such registration within the stipulated deadlines.
On September 25, 2023, Binance officially ceased all operations in Canada, but according to Fintrac until that day it had been operating in violation of Canadian regulations.
Several months have passed since then, and only last month Fintrac concluded its investigation and imposed the fine of 6 million CAD on the exchange.
Binance, however, has been out of the Canadian market for months now, and therefore has decided to oppose this sanction.
Thus, he decided to file an appeal against the fine with an appeal to the Federal Court in which he claims that he no longer offers his services to those based in Canada, and that any current involvement in the Canadian market is marginal compared to his global business.
The precedents in the USA
Something very similar to Binance has also happened in the USA.
In the United States, however, the fine imposed was about 4 billion dollars, and the exchange agreed to pay.
It should not be forgotten that there is still a version of the exchange dedicated to the US market, Binance.US, and that the USA is the largest financial market in the world.
In Canada, only 39 million people live, which is almost a tenth compared to the 333 million of the United States of America.
It is therefore absolutely understandable the different attitude that the exchange is reserving for the two markets, and the two countries, given that the Canadian market could be almost completely abandoned and then ignored, while the US market remains a point of reference.
By now Binance, through Binance.US, is still really not very active in the USA, so much so that its exchange dedicated to the US market currently has daily trading volumes of less than 6 million dollars, compared to over 2 billion of Coinbase and the 15 billion of the international version of Binance.
Despite this, the company has nevertheless decided to comply with the impositions of the US authorities, while instead it has decided to oppose those of the Canadian authorities, despite a fine a thousand times lower.
