Cryptocurrency companies paid $580 million in fines in 2023, more than the entire traditional financial system
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Crypto and digital payments companies paid nearly $6 billion in fines in 2023 for deficiencies in customer checks and anti-money laundering control violations, data shows.
The Financial Times says crypto and fintech groups will face more fines in 2023 than the entire traditional financial system Report, citing data compiled by software provider Fenergo. Data shows that the crypto industry paid up to $5.8 billion in fines last year due to security flaws, anti-money laundering controls and failure to adhere to sanctions to address financial crime.
Much of this includes a $4.3 billion fine imposed on Binance, which U.S. prosecutors called “one of the largest corporate fines in U.S. history.” The report noted that this figure far exceeds the $835 million paid by traditional financial services groups and is the lowest level in a decade.
The data also showed that total fines for money laundering and financial crime offenses increased by more than 30% in 2023, reaching $6.6 billion, although the figure is still below the peak of $11.3 billion in 2015. According to the Financial Times, the number of fines against cryptocurrency companies increased significantly last year, with cryptocurrency companies facing 11 fines, compared with an average of less than two per year over the past five years.
In late November 2023, U.S. Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero said that the regulator would continue to pursue illegal cryptocurrency exchanges and emphasized that the agency was working hard to crack down on Services that help users circumvent KYC rules.
Romero’s statement comes shortly after Binance CEO Changpeng Zhao made headlines alongside another disgraced cryptocurrency entrepreneur, Sam Bankman-Fried, pleading guilty to charges against him and his cryptocurrency exchange, including violating U.S. Anti-Money Laundering Laws.
