- Binance has become the first exchange to be fined in Turkey for failing to comply with the country’s anti-money laundering laws.
- The exchange has been singled out for lack of AML and for laxity in KYC in the past in a number of other countries including the U.K and South Africa.
Yet another regulator has cracked down on Binance cryptocurrency exchange. This time, it’s in Turkey, but the allegations are somewhat similar to shortcomings identified by regulators in the U.K, the U.S, South Africa and a number of other states. Turkish regulators accuse the exchange of failing to abide by all the anti-money laundering regulations.
The Financial Crimes Investigation Board (MASAK) has imposed an 8 million lira ($750,000) fine on BN Teknoloji, the local unit of Binance. This is the maximum financial penalty that the regulator can impose for such a crime.
According to Anadolu, a state-owned news agency, the fine is the first that MASAK has imposed on a cryptocurrency platform since it was given authority over virtual asset service providers (VASPs) in the Middle Eastern country.
The agency didn’t disclose any further details about the nature of the offense. When reached for comments, the agency declined from commenting on the issue. A Binance spokesperson in turn said that the exchange doesn’t disclose its communications with regulators, especially on an ongoing matter.
MASAK charged Binance with violating Law No. 5549 on Prevention of Laundering Proceeds of Crime. This law requires financial companies in Turkey to identify and verify the identification information for all the customers on their platforms. It also requires them to report any suspicious activities by their clients within 10 days.
A history of AML non-compliance by Binance
This is not the first time that Binance is being accused of failing to be stringent with its application of anti-money laundering requirements. These accusations span as far back as 2018 when Zaif, a Japanese exchange now known as Fisco, was hacked and lost $60 million. Zaif would later file a lawsuit against Binance claiming that it facilitated money laundering of the funds stolen in 2018. Zaif claimed that Binance’s very light KYC allowed the hackers to easily cash out their proceeds to the tune of $9 million.
More recently, U.K banks have been cutting ties with the exchange for allegedly having very light AML and KYC requirements. TSB Bank, which has about five million customers, barred them from sending money to Binance claiming that the exchange’s lax AML and KYC requirements allowed several scammers to set up digital wallets and then use them to defraud unsuspecting clients.
Still in 2021, a South African bank started blocking its customers from purchasing digital currencies on Binance. According to local reports, the bank banned Binance for the same reason – lack of compliance with AML and KYC regulations in South Africa.