Binance Refutes 'Skewed' Money Laundering Claims

Binance has hired senior investigators from the IRS' cyber crimes unit over the past three years to improve its crime prevention.

AccessTimeIconJun 7, 2022 at 9:30 a.m. UTC
Updated May 11, 2023 at 6:51 p.m. UTC
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Binance, the world's largest cryptocurrency exchange by volume, has disputed claims that it has acted as a vehicle for the laundering of at least $2.35 billion in illicit funds.

  • A Reuters report claimed that Binance has become a "hub for hackers, fraudsters and drug traffickers" with strong links to Russia-based dark web market Hydra.
  • Matthew Price, Binance's senior director of investigations who was the lead investigator on Hydra when he worked at the IRS criminal investigation, told CoinDesk: "What I think is very skewed in this report is that every exchange has exposure to dark net markets."
  • Tigran Gambaryan, the exchange's global head of intelligence who also worked at the IRS' cyber crimes unit, added: "It's something that completely disregards facts to get an agenda across."
  • "The biggest part of this story is completely ignored. You can't control deposits, you can only control what you can do afterwards," Gambaryan added.
  • Price and Gambaryan said that Binance has a stringent process in place that handles exposure to fraud, dark net markets and scams using blockchain analytics software provided by Chainalysis and Elliptic.
  • "There is a system in place. We do have risk scoring for everything you can think of. We have everything tagged internally based on our tools, then we are able to do post-transaction monitoring with Chainalysis," Gambaryan noted.
  • Binance published 50 pages of email exchanges between its intelligence team and Reuters, in which it comments on recovering $5.8 million from the Ronin hack, as well as its assistance in multiple fraud cases.
  • The email exchange reiterates that the reporter was confusing "indirect" exposure to dark net markets and "direct exposure."
  • Data from Chainalysis reveals that 0.15% of all cryptocurrency transactions in 2021 were associated with illicit activity, while the U.N. estimates that between 2% and 5% of fiat currency is linked to some form of criminal activity.

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Oliver Knight

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.


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