It’s not enough to do, you had to do everything. According to American justice, Binance, the leader in crypto-asset exchange platforms, has largely failed in its obligations to report suspicious transactions. This is one of the reasons for the colossal fine of $4.3 billion which has just been imposed on the firm.
The sanction was accompanied by the forced resignation of his charismatic boss Changpeng Zhao, who pleaded guilty to end the prosecution. The judicial press release thus reports the transit on Binance for the purposes of laundering dubious “hundreds of millions of dollars”.
These flows came from ransomware gangs, online black markets or various scams. Certainly, as the American justice system points out, Binance did ask its users to provide their identity. But only from August 2021, and leaving former clients who are too discreet the possibility of making transactions until May 2022.
Communications Efforts
However, in recent years, Binance has gone to great lengths to show that it is cooperating with police around the world to detect illicit crypto flows. This cyber policeman from the center for combating digital crime, met in June 2022, also believed that the platform complied well with its regulatory obligations.
Changpeng Zhao’s firm notably told in June 2021 how it had contributed to the investigation into Fancycat. This gang was suspected of laundering more than $500 million in ransoms. The company explained that it had identified suspicious activity.
She then found, with companies specializing in blockchain investigation TRM Labs and Crystal, links with the Petya ransomware and the Cl0p cybercriminal group. In France, several legal cases had also been facilitated by the cooperation of Binance. Like for example the Platypus affair, this siphoning of a decentralized finance platform which is currently being judged in Paris.
Significant flows
However, these successes were clearly the tree that hid the forest. The indictment which has just been revealed mentions, for example, the transfer from the Hydra black market to Binance of the equivalent of $106 million in bitcoins between August 2017 and April 2022. Transfers, however, issued by a small number of addresses, while the bad reputation of the black market was well established.
Likewise, for a year, flows to the BestMixer mixer were also particularly intense, with volume amounting to $275 million. Exchanges finally stopped by the closure of this service by the Netherlands, in May 2019. The Treasury press release finally underlines that Binance, already pinned on this subject by Reuters, had not reported numerous transactions linked to gangs of Ransomware.
This type of cybercriminal, the digital scourge of the moment, is said to have laundered several million dollars in ransoms linked to at least 24 different strains of malware on the platform. In total, more than 100,000 suspicious transactions passed far too easily under Binance’s radar, and which have now earned it this colossal fine.