Reuters accuses Binance of laundering billions in illicit proceeds

Reuters accuses Binance of laundering billions in illicit proceeds

Reuters accuses Binance of laundering billions in illicit proceeds

One of the world’s largest cryptocurrency exchanges has been accused of laundering money for a handful of shady characters. Is there any truth to the claim, or is this just another crypto hit piece coming from the mainstream media? Here’s the full scoop.

The case against Binance

The news organization Reuters has accused the cryptocurrency exchange Binance of laundering approximately $2.3 billion worth of stolen and illicit cryptocurrency. Reuters' primary argument is that Binance didn’t do enough to identify who was using their exchange and where crypto deposits were coming from. As a result, Binance failed to seize stolen crypto and otherwise block the accounts of people and organizations who were using the exchange for money laundering purposes.

To justify their claims, Reuters point to data that they received from the onchain analysis company Crystal Blockchain. The data allegedly shows that in the last five years Binance was used to launder $780 million for Hydra, Russia’s largest darknet. German authorities have also brought allegations against Binance, claiming that the exchange was used to launder about $800 million worth of illicit crypto that was acquired through fraud and theft.

There’s even the question of whether Binance laundered $5.4 million for Lazarus. Although many people aren’t familiar with the name, Lazarus is a North Korean government-backed hacking cartel that has stolen billions in crypto since its inception. Just as one example of many, Lazarus is widely believed to have hacked Axie Infinity’s Ronin sidechain for $600 million, the largest DeFi attack in history.

Binance’s dealing with Hydra users - IMG Source

Of course, Binance refutes the allegations. In an article directly addressed to Reuters, Binance claimed, “Opponents have bent over backwards to try and create a narrative that Binance, and large exchanges more broadly, have been negligent in applying anti-money laundering and transparency protocols. Nothing could be further from the truth.”

The article goes on to claim, “The reality is that Binance has the world’s most sophisticated anti-money laundering systems and employs the most experienced anti-money laundering investigators not only in crypto but in the world, and regularly provides law enforcement with leads and other information that helps them detect and deter crimes.”

Binance’s blog article refutes Reuters’ claims 

What Binance has going for them is that this supposed money laundering, to the tune of $2.3 billion over the course of five years, is only a sliver of their overall operations. During that time Binance had a trading volume in excess of $9 trillion. The claimed illicit transactions represent just 0.02% of the exchange’s total volume.

On the other hand, it’s silly for Binance to claim that they’re at the forefront of security. Binance was one of the last major exchanges to adopt KYC identity checks for customers, and the exchange was long known as the place where anyone could sign up for an account without providing real information.  

What’s going to happen next? The Reuters piece does not have any legal power and Binance is not currently facing anything worse than a tarnished reputation. However, now that Reuters has brought everyone’s attention to the matter, there’s always some chance that regulators will step in and bring legal action against the exchange.

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This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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