The world’s largest crypto exchange is working with law enforcement to track and trace suspicious accounts and fraudulent activities and tamp down on terrorism financing, ransomware, human trafficking, child pornography, and financial crimes using crypto.
Binance’s action comes after the FBI recently warned investors of the risks decentralized finance (DeFi) platforms face from hackers and after the U.S. Treasury issued a report laying out a detailed plan to combat the use of crypto for financial crimes, such as money laundering and terrorism financing.
“As more regulators and public law enforcement agencies look at crypto, Binance is seeing demand for training to help educate on and combat crypto crimes,” said Tigran Gambaryan, global head of intelligence and investigations at Binance and a former special agent of the Internal Revenue Service's criminal investigation cyber crimes unit.
Crypto lost from hacks has surged in 2022, according to blockchain analytics firm Chainalysis, with more than $202 million stolen in August in addition to the $1.9 billion of investor funds lost through the end of July, a 37% increase from last year.
Since November 2021, the Binance investigations team has responded to more than 27,000 law enforcement requests.
To meet that demand, Binance is building out a team, including former government officials from around the world, to conduct more training and work hand-in-hand with regulators here and abroad.
Matt Price, senior director of investigations for Binance says he’s regularly in touch with the FBI, Secret Service, Homeland Security, IRS, and Justice Department on cases, passing information back and forth.
“When I was working these cases on the government side, being able to pick up the phone and know as an investigator in the government that I can contact someone in the industry for help on working a hack would have helped me take action very quickly,” Price, who was also a special agent with the IRS criminal investigation cyber crimes unit in Washington, said. “That's where these public private partnerships really come in. It's that ability to share the information back and forth.”
For instance, when a Binance customer’s phone was stolen in the U.K. and $350,000 was drained out of his account, Price was able to trace where the thief took the money.
“The bad guy also happened to have an account with Binance," Price said. "So I was able to freeze that [and] provide that information to the police in the U.K., who arrested the guy, locked him up, and got the money back.”
Price said if the FBI is working a crime on a newer decentralized finance protocol, the agency can call him, and if he doesn’t know the answer, he can ask one of the developers within the company how it works and what they should look for.
“[Criminals] are doing the same thing they did in the past. They're just moving to the new technology. People are still going to try it,” Price said. “But if every time you do it, you know that the industry and the law enforcement agencies are working together to try to catch you, it makes it a lot harder.”
