Media: at least $ 2.35 billion was laundered through Binance in five years

Between 2017 and 2021, cybercriminals laundered at least $2.35 billion in illegally obtained funds through the Binance cryptocurrency exchange, Reuters analysts found out.

During the investigation, experts studied the judicialprotocols, law enforcement statements and data from blockchain analysis companies. According to the information received, funds received from hacks, investment fraud and drug sales were laundered through the platform.

Key figures:

• From 2017 to 2022, buyers and sellers of the Hydra darknet marketplace used Binance to conduct $780 million worth of cryptocurrency transactions.
• According to Chainalysis, in 2019 alone, the exchange received $770 million worth of malicious funds, outperforming all platforms in this indicator.
• Law enforcement officers in Germany reported that in 2020 Binance was used to launder part of the proceeds from fraudulent schemes, as a result of which the victims lost a total of 750 million euros.
• North Korean hackers Lazarus sent part of the funds to Binance from the hacks of the Slovak exchange Eterbase and the Ronin sidechain.

Reuters noted that until mid-2021, the exchange had weak AML procedures.

According to media reports, in 2020, a few hours after the Eterbase hack, hackers opened at least 20 anonymous accounts on Binance, which allowed them to convert stolen funds and "hide their money trails."

Hydra-related cryptocurrency transactions through Binance dropped sharply after the exchange tightened customer verification procedures in August 2021, the researchers said.

At the same time, Reuters noted that the share of "dirty" cryptocurrencies that passed through Binanceis only a small fraction of the total trading volume of the exchange. 

Binance's Chief Communications Officer, Patrick Hillmann, called the calculations presented in the article inaccurate.He also stated that the exchange is engaged in transaction monitoring and risk assessment to "ensure that any illicit funds aretraced, frozen, recovered and/or returned to their rightful owner." 

In response to the investigation, the exchange alsopublished a blog post stating that, contrary to popular belief, cryptocurrencies are not the main method used by criminals to launder funds. The entry appeared on Binance prior to the publication of the Reuters investigation.

The report does not directly mention Reuters, but there is a reference to a certain journalist who allegedly "has evidence that Binance allowed about $2.5 billion to be laundered between 2017 and 2022."

The exchange noted that for money laundering, "it is much easier to open a bank accountwith forged documents in a small regional bank" than to use cryptocurrencies. 

Binance emphasized that cryptocurrency platforms apply strict KYC procedures, large transactions cannot be made quietly and can be easily tracked through the blockchain.

The company also announced cooperation with law enforcement officers, the use of "the most advanced systems" to combat money laundering and work with a large team of cybercriminalists. 

Binance noted that in the case of the Ronin hackmost of the stolen funds ended up on other exchanges and went through the Tornado Cash Ethereum mixer. In cooperation with law enforcement and analysts, Binance froze approximately $5.8 million in hack-related assets.

The exchange also mentioned the Eterbase hack with the discoverydozens of anonymous accounts on the crypto platform by Lazarus hackers. The company announced cooperation with the Slovak authorities, during which Binance identified such accounts both on its site and on other exchanges.

The statement also refers to the indirect use of "every major exchange" to conduct cryptocurrency transactions related to the Hydra marketplace.At the same time, Binance noted that it was the traceability of crypto assets that contributed to the investigation of the activities of the darknet platform. 

"This is an 'inconvenient truth' for those who oppose cryptocurrencies – the vast majority of all laundered money passesthrough the traditional banking system, not crypto assets," Binance concluded.

Recall that in January, Reuters wrote that Binance had repeatedly withheld information fromregulators, neglected KYC procedures and acted contrary to the recommendations of its own compliance department. 

In April, the media reported that the regionalThe representative office of the exchange agreed to share information about Russian clients with Rosfinmonitoring and the FSB in exchange for assistance in doing business in the state. Binance published correspondence with Reuters journalists and denied the allegations.

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