Cryptocurrency and FinTech companies were fined $5.8 billion in 2023 for lax financial controls.

That figure marks the first time fines against these groups exceed those against traditional finance firms, according to a Financial Times (FT) analysis published Tuesday (Jan. 9).

The fines were for things like failure to conduct proper money laundering measures or customer checks, as well as other financial crime-related issues. Meanwhile, traditional financial services companies paid $835 million in fines last year, the report said, the lowest figure in a decade.

However, Dennis Kelleher, CEO of regulation advocacy group Better Markets, told the FT the numbers were a measure of bad practices among crypto firms, not a sign that traditional banks had improved their behavior.

“The pervasive fraud and criminality in the high-profile crypto arena forced regulators and prosecutors to divert resources,” he said, calling it an attempt to “stop the egregious conduct and try to deter it from getting even worse.”

In addition, the number of fines against crypto and payments companies jumped last year, the report said, with crypto companies incurring 11 fines compared to an average of less than two per year seen over the last five years.

Payments companies incurred 27 fines last year, versus an average of around five a year between 2018 and 2022. Nearly all of these companies were less than 20 years old.

A bulk of that $5.8 billion in fines came from the $4.3 billion penalty against Binance by the U.S. Department of Justice (DOJ).

As part of that agreement, founder and CEO Changpeng Zhao stepped down from the company and will plead guilty to violating money laundering rules. The company had been accused of violating the federal Bank Secrecy Act and of breaking sanctions against Iran.

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed — now it is paying one of the largest corporate penalties in U.S. history,” Attorney General Merrick Garland said at the time.

As PYMNTS wrote soon after the settlement, a DOJ report found that because Binance failed to implement an effective anti-money laundering program, illicit actors used Binance’s exchange in several ways.

One compliance employee at the company even wrote, “we need a banner: ‘is washing drug money too hard these days – come to Binance we got cake for you.’”