Binance Disputes Claim Its Exchange Hosted $2.35 Billion In Laundered Illicit Funds

Binance, the world’s largest cryptocurrency exchange, has processed transactions totaling at least $2.35 billion stemming from hacks, investment frauds and illegal drug sales, according to a Reuters investigation, published Monday. The data provided by Amsterdam-based analysis firm Crystal Blockchain showed that from 2017 to 2022 buyers and sellers on the world’s largest darknet drugs market, a Russian-language site called Hydra, used the exchange to make and receive payments worth $780 million.

Additionally, the German police said investigators began seeing criminals in Europe turn to Binance in 2020 to launder some of the proceeds from investment fraud schemes that caused victims, many of them pensioners, to lose a total of $750 million euros ($800 million).

The flow of illicit funds through the exchange represents a very small portion of Binance’s overall trading volume (over $9.5 trillion in 2021 according to The Block) but is still significant as regulators and policymakers, including U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde, raise concerns over the illegal use of cryptocurrencies. The FTC last week reported that more than $1 billion had been illicitly obtained from crypto fraud and scams between January 2021 and March 2022.

Reuters has also revealed for the first time how North Korea’s hacking group Lazarus, which allegedly helps fund Pyongyang’s nuclear weapons program, used Binance to launder some $5.4 million of cryptocurrency stolen in September 2020 from Slovakian crypto exchange Eterbase. In January, Reuters reported that Binance has kept weak money-laundering checks on its users until mid-2021 despite concerns raised by senior company officials.

Binance’s chief communications officer Patrick Hillmann told Reuters in an email that Binance did not consider the news outlet’s calculation to be accurate. Hillmann reportedly said that the exchange uses transaction monitoring and risk assessments to “ensure that any illegal funds are tracked, frozen, recovered and/or returned to their rightful owner” and is working closely with law enforcement to disrupt criminal networks using cryptocurrencies, including in Russia.

In a statement to Forbes, Binance has called the report a “woefully misinformed op-ed that uses outdated information from 2019 and unverified personal attestations.” “The fact is that Binance has some of the strictest AML policies in the fintech industry and plays a significant leadership role in helping law enforcement deal with cyber and financial crime. Since the article ran, we have received an outpouring of support from partners in law enforcement across the globe,” a Binance spokesperson said.

Editor’s note: the story and headline were updated to reflect Binance’s response.

I report on cryptocurrencies and other applications of blockchain technology. I also edit the weekly Forbes Crypto Confidential newsletter

Source: Binance Disputes Claim Its Exchange Hosted $2.35 Billion In Laundered Illicit Funds

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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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Bitcoin And Crypto Now Braced For A $10 Trillion Earthquake As Ethereum, BNB, XRP, Solana And Cardano Soar

Bitcoin and cryptocurrencies have rebounded this week, riding a wave of good news for the crypto market.

The bitcoin price jumped to over $45,000 per bitcoin after a senior Russian official said the country would accept bitcoin as payment for its energy exports. Meanwhile, the ethereum price has continued to climb as “enthusiasm” builds ahead of a long-awaited upgrade.

Now, Larry Fink, the chief executive of BlackRock, the world’s largest asset manager with around $10 trillion in assets under management, has said his company is “studying” digital currencies due to climbing client demand.

“As we see increasing interest from our clients, BlackRock is studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our clients,” Fink wrote this week in a letter to BlackRock shareholders.

Fink has previously dismissed bitcoin and crypto, saying in a CNBC interview last year that he doesn’t see much demand for crypto. In February, Coindesk reported BlackRock was gearing up to follow other Wall Street giants including Goldman Sachs, Morgan Stanley and Citi, into crypto services, and is planning to let clients borrow from BlackRock by pledging crypto assets as collateral.

This week, Goldman became the first major U.S. bank to trade crypto over the counter, working with crypto merchant bank Galaxy Digital to offer a bitcoin-linked instrument called a non-deliverable option.

Fink, who branded bitcoin an “index of money laundering” five years ago, pointed to Russia’s invasion of Ukraine and wide-ranging financial sanctions placed on the country as a catalyst for mainstream crypto adoption.

“The war will prompt countries to re-evaluate their currency dependencies,” Fink wrote. “Even before the war, several governments were looking to play a more active role in digital currencies and define the regulatory frameworks under which they operate.”

The war in Ukraine has also upended the world order that had been in place since the end of the Cold War, according to Fink, who predicted it will “put an end to the globalization we have experienced over the last three decades.”

“It has left many communities and people feeling isolated and looking inward,” he wrote. “I believe this has exacerbated the polarization and extremist behavior we are seeing across society today.”

Fink’s comments chime with others in the financial world who see strict Russia sanctions, which have included the country’s banks being excluded from the SWIFT interbank messaging service and restrictions put on the central bank’s foreign exchange reserves, as a shake-up of the system.

In March, a Credit Suisse analyst said the Russian war in Ukrainian will create a new world financial order that could boost the price of bitcoin and other cryptocurrencies.

“We are witnessing the birth of Bretton Woods III—a new world (monetary) order centered around commodity-based currencies in the East that will likely weaken the Eurodollar system and also contribute to inflationary forces in the West,” Zoltan Pozsar, global head of short-term interest rate strategy at the giant investment bank, wrote in a report.

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of

Source: Bitcoin And Crypto Now Braced For A $10 Trillion Earthquake As Ethereum, BNB, XRP, Solana And Cardano Soar



The Federal Reserve’s surprisingly hawkish policy turn has had a surprise beneficiary: Cryptocurrencies. Digital coins extended gains on Thursday after the Fed stepped up its taper, and laid the foundation for a tightening cycle that could bring as many as three rate hikes in 2022. Normally, cryptocurrency benefits from loose monetary policy and its inflationary side-effects; but at least for now, investors are taking the longer view.

Bitcoin (BTC-USD), barely a week removed from an ugly selloff that dragged it below $50,000, rallied by over 2% on the day. Other digital coins that power smart contract layer-1 blockchains like Ethereum (ETH-USD) — which helps power the blockchain for the majority of decentralized finance (DeFi), non-fungible tokens (NFTs) and other smart-contract applications like Decentralized Autonomous Organizations (DAOs) — Solana (SOL1-USD), Terra (LUNA1-USD) and Avalanche (AVAX-USD) are also posting big gains.

It’s been a rough fall for cryptocurrencies, even as the introduction of Bitcoin exchange-traded funds (ETFs) lure in smaller investors. In recent weeks, the value of the asset class has plummeted by more than $700 billion from almost $3 trillion to $2.15 according to Coinmarketcap.

Fears over the Fed’s policy and the Omicron variant of COVID-19 have contributed to a volatile tone in markets, with crypto trading in tandem with risk-sensitive stocks. Louis LaValle, a managing director with crypto investment firm 3iQ Digital Assets U.S., told Yahoo Finance that crypto’s whipsawing is linked to the sheer volume of new investors, especially institutions, who purchased digital coins for the first time this year.

That includes billions that have flooded into crypto derivatives. Open interest on BTC futures is down by $10 billion since October, but still more than twice as high as the $8 billion it saw a year ago, according to data from The Block.

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The IRS Goes Undercover As A Bitcoin Trader In $180,000 Sting

On the hunt for tax cheats, fraudsters, money launderers and dark web drug dealers, the Internal Revenue Service (IRS) has sent an undercover agent to work on a market for trading bitcoin, ether and other cryptocurrency.

In a search warrant reviewed by Forbes, the undercover IRS agent went by the name of “Mr. Coins” on, a platform exchanging cryptocurrency for dollars and other fiat currencies. Mr. Coins’ profile, still live at the time of publication, had 100% positive feedback after shifting up to $200,000 in digital money.

But his biggest success may have been to take down an alleged dark web drug dealer, tricking him into sending more than $180,000 in cash to the IRS in exchange for cryptocurrencies, according to the warrant.

In June of last year, Mr. Coins put up an advertisement offering to buy bitcoin via cash by mail and above market prices. All sellers had to do was get in touch over encrypted messaging apps Wickr or WhatsApp.

Shortly afterward, a person going by the name “Lucifallen21” got in touch to inquire about the ad, according to the search warrant. The IRS, without saying how, determined that Lucifallen21 was actually Evansville, Indiana, resident Chase Hite. By July, he’d agreed to buy from Mr. Coins, wrapping up $15,040 in cash in clothes, putting the money in a box and posting it to the agent in exchange for approximately 1.59 bitcoin, according to the government’s account.

More payments came in, with nearly $20,000 posted in August, in exchange for approximately 1.34 bitcoin and 45.2 monero, another cryptocurrency that promises better privacy protections than its rivals, the government said, adding that nearly $65,000 was sent to the agent over following months.

Come March this year, investigators were getting ready to home in on the conclusion to the sting operation. A $28,000 cash package from Hite was intercepted and marked as lost by the Postal Service, according to the IRS, which then monitored calls to the post office, waiting for the suspect to call and complain. Investigators linked this call with a phone number that was paid for by Hite.

Further messages over Wickr indicated Hite was involved in dark web drug sales, claiming to sell “pills and opioids,” as well as cocaine and marijuana, the IRS claimed. As they deepened their relationship, the undercover officer agreed to provide Hite with a loan, by which the suspect would send $54,000 in cash and get $79,000 worth of cryptocurrency in return, according to the search warrant. When that last package arrived, forensics took fingerprints and linked them to Hite, the government added.

Hite was arrested in July and has not yet filed a plea. The charges were filed in the Eastern District of New York. His lawyer declined to comment. LocalCryptos hadn’t responded to requests for comment. The IRS declined to provide more information than what had been filed in court.

The tax collecting agency has a track record of going undercover to snare cryptocurrency-using criminals. Earlier this year, it was revealed that the agency had organized a payment to a service called Bitcoin Fog, which offered to launder money.

The agents said they wanted to launder cryptocurrency they’d earned by selling Ecstasy, according to a criminal complaint, first reported by Wired, in which a Russian-Swedish administrator was charged. And in March, the IRS pretended to be a seller of counterfeit Gucci products sourced from China, asking the defendant in that case to convert bitcoin that they claimed to have acquired in selling the merchandise.

But this latest sting is a rare case where the IRS set up a profile on a cryptocurrency trading platform and created what amounts to a watering hole, with agents just waiting for criminals to dive in.

This story is part of The Wire IRL feature in my newsletter, The Wiretap. Out every Monday, it’s a mix of strange true crime and real-world surveillance, with all the relevant search warrants and court documents for you to pore over. There’s also all the cybersecurity and privacy news you need to read. Sign up here.

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I’m associate editor for Forbes, covering security, surveillance and privacy. I’m also the editor of The Wiretap newsletter, which has exclusive stories on real-world


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Bank ATMs And Teller Counters Need Covid-19 Scrubbing: Survey

Money laundering is a legal no-no for banks, but secret inspections at U.S. locations suggest their ATMs and teller counters could use a good scrubbing with Purell.

Despite most retailers’ near-obsessive attention to details that send a Covid-19 wellness message, America’s financial institutions are communicating relative indifference. Secret shoppers sent to bank branches saw just 7% of ATMs being cleaned. Greeters at branch doors wore masks 44% of the time, and only 19% of teller areas were cleaned between customers.

Dalbar, which audits and rates practices by financial firms, released the results of its nationwide study Friday. The company sent mystery shoppers to 500 branches in the U.S. and 200 branches in Canada, auditing 14 major bank brands during the three-week period that ended August 10.

ATMs were the biggest points of weakness in the U.S. Although 91% of Canadian banks deployed additional safety measures at ATMs to protect customers—separators between machines, signs to indicate where to wait, or hand sanitizer at the ATMs—fully half of U.S. branch ATMs had no such additional safety measures at all.

Bank of America, Chase and Citibank had the only branches where tellers wore masks 100% of the time. The other U.S. brands in the survey were Capital One, Fifth Third, PNC, SunTrust, TD Bank, US Bank and Wells Fargo. Canadian banks in the survey were BMO, CIBC, RBC and Scotiabank.

U.S. bank branch tellers were seen wearing masks on average 94% of the time. The average in Canada was 80%. In both countries, about 1 out of 5 branches lacked markings or signage to reinforce social distancing at or near teller windows.

“I was a little surprised and wasn’t surprised,” Michelle Slute, vice president of research for Dalbar, told Zenger News. “It wasn’t a surprise because you’re hitting the human factor and bumping up against different cultures across the country.” Since it was running a mystery shopper study, Dalbar did not contact any of the banks in advance about the study, so it had no access to what corporate directives might have been in place.

Zenger contacted all the U.S.-based banks mentioned in the study. Of the four that responded—Bank of America, SunTrust (merged with BB&T to form Truist), US Bank and Wells Fargo—none had previously received copies of Dalbar’s data.

A statement from Truist, formed by a merger of SunTrust and BB&T, noted: “We have not seen or read the study you referenced, so we are unable to provide comments on its findings. However, … client and teammate safety are our top priorities and are at the forefront of all our decisions.”

The data that Dalbar released showed SunTrust performing about average among banks in the United States.

A security guard wearing mask and gloves looks into a branch of the Wells Fargo bank, amid the novel … [+] AFP via Getty Images

“While we haven’t had the opportunity to review the data and study, the well-being of our customers, colleagues and communities continues to be our top priority. We have processes and protocols in place around the use of PPE, and we encourage customers to reach out if they have concerns about their use at their local branch,” a statement from US Bank read, referring to personal protective equipment.

Dalbar’s data showed US Bank performing below average on measures at ATMs and lowest overall rankings at the teller.

Wells Fargo provided Zenger with a list of steps it has taken, including temporarily closing one-fifth of its branches, offering some services by appointment only, requiring employees to use face coverings, and employing enhanced cleaning. The bank also pointed to a study from the market research firm Ipsos, which rated it as the top financial services brand in signage and cleanliness measures.

The Ipsos rankings, also compiled from mystery-shopper reports, showed 96% of the Wells Fargo locations had signs telling customer to wear masks, versus a nationwide average of 87%. Shoppers observed surfaces being wiped down after a customer visit 32% of the time.

Dalbar noted roughly the same level of post-visit cleaning at Wells Fargo branches, compared to an overall average of 19%, but had the company tied for third place on the average of teller safety measures.

“Health and safety of our employees and clients is our top priority,” said Bank of America, responding to Zenger, and also noted that and listed steps it has taken, like requiring all its employees to wear masks, and disinfecting its branch ATMs daily.

TD Bank street decal, Stand Together by Standing Apart, Manhattan, NY
TD Bank street decal, Stand Together by Standing Apart, Manhattan, NY. (Photo by: Joan … [+] Education Images

While Dalbar found all Bank of America tellers wore masks, just under 80% of employees managing traffic flow and making first customer contact could say the same. Hand sanitizer was available at slightly more than 20% of Bank of America ATMs, and fewer than one-fifth had dividers installed between machines.

Bank of America’s rating for teller safety measures in the Dalbar survey came out on top, but was well under 80%. Other domestic banks, in order of ranking, were Citibank, Capital One, Wells Fargo, SunTrust, PNC, Fifth Third, TD, Chase, and US Bank, ranging from just over 75% to under 65%.

The survey’s results “surprised us,” said Dalbar’s Slute. “Especially at the ATMs, like with Citibank and Bank of America not having hand sanitizer [at every machine].”

“There was no clear winner overall. We were expecting a Bank of America or Citibank to have it locked and loaded all the way across,” she said of the big banks’ strategies. “If there are holes in it, you’re only as strong as your weakest link.”

(Edited by David Martosko and Allison Elyse Gualtieri.) Follow me on Twitter. Check out my website.

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