Binance exchange has been severely criticized on multiple occasions for the role it plays in money laundering. One notable accusation was that between 2017 and 2022, Binance served as the middleman for transactions worth $2.35 billion associated with hackers, fraudsters, and drug dealers. Interestingly, the world’s leading exchange has refuted these claims stating its stance on money laundering.
Binance Fights Dirty Money, Not Support it
A few days ago, Binance revealed a lot of truths about the role it plays in money laundering. Rather than support money or crypto laundering, Binance has spent millions of dollars to fight this gross crime.
On its blog, Binance also compared statistics of cryptocurrencies associated with dirty activities with that of the fiat of cash. Data from Chainalysis reveals that in 2021, only 0.15% of cryptocurrencies of the total cryptocurrency capitalization was associated with illicit activities.
On the other hand, the United Nations estimates that 2% to 5% of fiat currencies were used in dirty activities. Thus, while crypto antagonists usually wail about the fact that cryptocurrencies are being used for money laundering and illegal activities, more fiat is being used for this illegal stuff.
Binance also pointed out that the transparency of blockchain makes it easier for fraudulent users to be exposed. Blockchain transactions are transparent and immutable, and several defaulters who attempted money laundering or cyber scam using cryptocurrencies have been traced via their blockchain footprints.
Binance Fishes out the Fraudsters
Binance claimed to have the most sophisticated anti-money laundering systems in the world. Some time ago, a cybercrime group in North Korea stole millions of dollars and spread the money across multiple exchanges. While a vast majority of the stolen funds were sent to other exchanges, Binance was able to freeze $5.8 million worth of cryptocurrency from the criminal group known as Lazarus. The centralized exchange also worked closely with authorities to identify other accounts related to this group.
In another case, Hydra, a darknet marketplace was shut down. The Russian company was linked with several centralized exchanges. However, more traditional banks were used by Hydra than even crypto exchanges and without on-chain data, it would have been impossible to trace the illicit funds used by the establishment.
Despite criticisms from despisers, Binance is doing all it can to fight financial and crypto crime. It has successfully done so in the past and will keep doing so.
