Enforcement Action Levied Against Turkish Binance As Exchange Slips Up On Compliance

International crypto exchange platform Binance has seen its Turkish branch fined over $700,000 by Turkey’s financial watchdog due to failure to meet its AML standards.

Turkey’s Financial Crimes Investigation Board (MASAK) has now levied enforcement action against Binance Turkey as the exchange has failed the regulatory body’s audit done for Anti-Money Laundering (AML) compliance.

Crypto AML compliance framework

The AML stands for Anti-Money Laundering; it is a compliance framework that features guidelines that can be followed to curb money laundering and terrorism finance through cryptocurrency. 

It involves using KYC-know your customer protocols to tabulate detailed information about a crypto organization’s customers, including video or image snapshots and relevant real-life identification proofs.

The information gathered is utilized in the case of suspicious transactions and fraudulent activities to track down and apprehend perpetrators of such acts.

Turkey’s AML compliance And Binance’s Breach Of Ethics

Turkey’s Financial Crimes Investigation Board (MASAK), under the country’s Ministry of Finance and Treasury, has found the country’s branch of Binance wanting. Reportedly, the exchange has been judged guilty of flaunting regulations and compliance acts that ensure the impossibility of money laundering through crooked mechanisms.

In a publication by a local news outlet, Anadolu Agency, MASAK had undertaken an audit for Binance according to its constitution’s legislation of Law No 5549 that pertains to the prevention and eradication of money laundering acts popularly known as the AML law. The result obtained from the audit report indicates Binance’s failure to meet the compliance standards.

Legislation on AML in the country mandates institutions to collate and subsequently confirm users’ identification data in the industry. Customer names, date of birth, national identification numbers, diverse licenses, credit card numbers, and others are required for registration.

In the event of CFT flagged transactions, the Law mandated crypto organizations to report such transaction details to appropriate authorities within ten days of occurrence.

As Binance has failed to match the standards imposed by Turkey’s regulator, a fine of 8 million Lira, approximately $750,000, has been levied against the exchange for reparations.

According to Turkey’s AML regulations, a fine of 8 million Turkish Lira is the maximum allowable limit for regulatory fines. The enforcement of the limit fine on Binance shows how significant the watchdog considers Binance’s breach of ethics.

Either by design or coincidentally, the timeline for MASAK’s enforcement action overlaps with Turkey’s revelation of its new crypto legislation draft through the office of its President that will summarily be forwarded to the nation’s parliament for approval.

Crypto Regulations In Turkey

With this new development, Binance has emerged as the first crypto entity in the country fined by its regulators. The exchange won’t be the last victim of the legislation as its regulators have upgraded its regulations and compliance guidelines to match the FATF’s latest policies regarding virtual assets and service providers.

Earlier this year, the Financial Action Task Force (FATF), a global entity responsible for anti-money laundering and combat Financing Terrorism regulations has issued a host of guidelines that nations all over the world should abide by to meet its international standards.

In a statement released by the office of Turkey’s Treasury and Cost Minister, the country is working strictly with the parameters put down by the FATF to comply with the global regulator.

Other Crypto Entities in the country are likely to fall victim to these new and upgraded regulations for a short period before complete adaptation to the guidelines nationwide.

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