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Binance Failed To Deliver On Money-Laundering Prevention Promises
A Reuters report says the cryptocurrency exchange has been lax in cracking down on the financial crime.
Himanshu S.
3:51 11th Jul, 2022

Binance, the largest cryptocurrency exchange by traded volume, made only weak attempts to prevent money laundering, Reuters said.

Binance operated outside the rules that many rival firms follow, while being ambiguous over the jurisdiction in which the main business is located, the news organization said.

Reuters also said Binance CEO Changpeng "CZ" Zhao ignored advice from his compliance team on the lack of background checks to avoid facilitating money laundering through the exchange.

Last month, Reuters reported that Binance became a "hub" for hackers, fraudsters and drug traffickers, claims that were rejected by Binance compliance officer Matthew Price, who said the report used skewed metrics to "get an agenda across."

In a bid to curb money laundering on the platform in 2021, Binance slashed its daily withdrawal limit for accounts that had not passed know your customer (KYC) protocols to 0.06 BTC from 2 BTC.

It recently ramped up its hiring of regulatory experts, recruiting Seth Levy, who spent 16 years at U.S. regulator Financial Industry Regulatory Authority FINRA, and Steven McWhirter from the U.K.'s Financial Conduct Authority in April.

Binance had not responded to CoinDesk's request for comment by publication time.

In a statement to Reuters, a Binance spokesperson said that “we are both leading and investing in the future technologies and legislation that will set the crypto industry on the road to becoming a well-regulated, secure industry.”

In a separate story, Reuters said Binance continued to serve customers in Iran until September 2021. While the exchange announced a ban on Iranian citizens in November 2018 after the U.S. reimposed sanctions, Reuters found seven traders who said they'd been able to use Binance until the KYC checks were tightened last year.


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