Over the course of five years, Binance was reportedly responsible for the laundering of $2.3 billion in illicit assets.
As a result of the anonymity offered by the digital currency, criminals such as hackers, drug dealers, and fraudsters were able to use Binance without the exchange being aware of their activities, Reuters reports.
An international survey was conducted in which law enforcement, academics, and crime victims were questioned about the stock market’s money laundering problems. The amount of money that was laundered was determined using blockchain data, court records, and police testimony.
Binance security flaws
In the year 2020, a North Korean cyber group known as Lazarus used crypto exchange Binance to steal funds from a crypto exchange in Slovakia. The number of losses reached 5.4 million dollars.
The hackers are believed to have used anonymous Binance accounts to hide the stolen funds, which were intended to fuel North Korea’s nuclear development efforts.
Binance assisted in the money laundering process for Hydra, which is the largest darknet drug market in the world. Binance exchange customers sent and received Bitcoin payments totaling $780 million.
According to the findings of the investigations, Binance was aware that users of the Hydra platform were using it. The information was distributed in the Russian Binance telegram.
The exchange upgraded its anti-money laundering (AML) processes in August 2021, which coincided with a significant decline in trading volume for Binance and Hydra. The platform is no longer accessible.
Binance users can be taken advantage of by scammers
Additionally, A$16 million was stolen from the wallet of an Australian investor who was hacked using Binance. Following a security review of Binance, the cryptocurrency was withdrawn by cybercriminals.
Binance believes the estimates are inaccurate and has denied CEO Changpeng Zhao’s interview request.
The anonymity provided by cryptocurrencies
Apparently, those involved in the illegal activity have used the cryptocurrency Monero to buy drugs through the Binance exchange. The privacy that Monero provides makes it a more useful currency than Bitcoin.
Zhao reportedly pushed the idea of privacy coins to his colleagues in a video conference as a component of financial independence.
Due to inadequate anti-money laundering (AML) control, Binance was banned from some venues in 2021. Workers are said to have expressed discontent with the ease of access customers had once the exchange first opened.
In response to growing scrutiny over the inadequacy of Binance’s anti-money laundering measures, the exchange hired compliance specialists.
