Reuters discovered that one of the world’s top cryptocurrency exchanges, Binance, may have allowed billions of dollars worth of stolen assets to pass through its platform.
According to a report by Reuters, Binance may have facilitated the laundering of about $2.35 billion over five years. The investigation identified cases where hackers from North Korea, Russian drug traffickers, and European criminal groups handled money via the exchange.
Between 2017 and 2021, Binance reportedly handled over $2.35 billion in stolen funds. The funds came via on-chain hacks, investment scams, and illegal drug sales, the sum of which was determined based on court documents and law enforcement statements and with blockchain research firms’ support). According to the blockchain research group Chainalysis, Binance handled $770 million in illicit payments in 2019.
Reuters identifies companies who allegedly laundered money via Binance, including the Lazarus Group and the North Korean hacker gang that stole $550 million from the Ronin bridge in 2017. While Binance cooperated with the authorities to identify and freeze $5 million from the attack, how much could flow through the exchange is unknown.
Since early 2018, Hydra, a Russian-language darknet marketplace for trading illicit substances, has been reported to transact more than $780 million via Binance.
European organised criminal groups, who targeted the pensioners in Germany, Austria, and Spain, may have laundered more than $800 million in illicit proceeds through fraudulent trading websites via crypto exchanges, notably Binance.
Binance was the preferred cryptocurrency exchange because of its previously loose know-your-customer (KYC) identification verification procedures. Indeed, traffic between Binance and Hydra plummeted with the tightening of KYC requirements in August 2021.
When asked to comment on the Reuters investigation, a Binance spokesperson said that “the article uses outdated information from 2019 and unverified personal attestations as a crutch to establish a false narrative” before highlighting Binance’s cooperation with law enforcement in multiple cybercrime investigations.
