Binance Fails to Report Suspicious Transactions, Says U.S. Treasury
The U.S. Treasury has accused cryptocurrency exchange Binance of failing to report over 100,000 transactions related to illicit activities. The transactions were linked to darknet, scams, fraud, and other malicious activities. In addition, Binance allegedly did not implement an effective anti-money laundering program and failed to comply with know-your-customer regulations required under U.S. law for a significant number of its users.
According to the U.S. Department of the Treasury, this allowed illicit actors to freely transact on the platform, compromising the integrity of the financial system.
The Treasury also highlighted Binance’s failure to address risks associated with anonymity-enhanced cryptocurrencies, enabling users to conceal transaction information. Furthermore, Binance’s former Chief Compliance Officer reportedly claimed that founder Changpeng Zhao had a policy of not reporting such activity.
Previous Concerns and Allegations
Earlier in 2022, Reuters published a report revealing that Binance disregarded its own compliance department’s assessment by offering services to customers in high-risk money-laundering countries like Russia and Ukraine. Former executives had raised concerns about the weak KYC system, but Zhao allegedly ignored them.
They ignore facts, take words out of context, re-use 3 year old “news” (that was/is inaccurate).
Here is an example. The “Tai Chi” doc was brought up again. When we show direct evidence it was never adopted, they ignore it.
Email from Nov 2018. pic.twitter.com/hL88f6AeUD
— CZ 🔶 Binance (@cz_binance) October 18, 2022
Binance’s Zhao has consistently denied these allegations, criticizing journalists for being inaccurate and disregarding evidence. However, on November 21, 2023, Zhao stepped down as CEO and admitted guilt for violating U.S. anti-money laundering requirements.
Hot Take: Binance Faces Accusations of Failing to Report Suspicious Transactions
The U.S. Treasury has accused Binance, one of the largest cryptocurrency exchanges, of failing to report more than 100,000 transactions associated with illicit activities. This includes darknet transactions, scams, fraud, and other malicious behavior. The Treasury also claims that Binance did not implement effective anti-money laundering measures or comply with know-your-customer regulations for a significant number of its users. Additionally, Binance allegedly allowed users to obscure transaction information using anonymity-enhanced cryptocurrencies. Former executives have raised concerns about these issues, but founder Changpeng Zhao reportedly ignored them. Despite Zhao’s denial of the allegations, he recently stepped down as CEO and pleaded guilty to violating U.S. anti-money laundering requirements. This case raises concerns about the integrity of cryptocurrency exchanges and the need for stronger regulatory oversight.
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