Binance Processed Millions for “Money Laundering Machine” Bitzlato: Report

Binance Processed Millions for “Money Laundering Machine” Bitzlato: Report

Binance Processed Millions for “Money Laundering Machine” Bitzlato: Report

  • Binance processed $346 million for Bitzlato, the crypto exchange shut down by US authorities, Reuters reported.
  • The report reviewed blockchain data showing that Binance was the largest Bitcoin trader and the largest recipient of funds from Bitzlato.
  • Binance has previously been accused of processing crypto associated with illegal activities and having weak money laundering controls.

Binance reportedly processed $346 million worth of Bitcoin for Hong Kong-based Bitzlato, the crypto exchange shut down by US authorities last week for allegedly being a Russian “money laundering machine.”

According to blockchain data compiled by Chainalysis, Binance has processed over 20,000 bitcoin over 205,000 transactions for Bitzlato since 2018. That’s an amount worth $345.8 million at the time of the transactions, Reuters reported on Tuesday.

The US Treasury Department’s Financial Crimes Enforcement Network previously found that Binance was the largest Bitcoin trader for the closed crypto exchange. Additionally, $175 million was transferred directly from Bitzlato to Binance, making Binance also the largest recipient of funds from Bitzlato, Reuters said. $90 million of those transfers are said to have occurred after August 2021, the month Binance introduced identity checks as part of its anti-money laundering program.

The Justice Department and Treasury Department alleged that Bitzlato laundered over $700 million linked to illicit Russian finances, prompting them to shut down the platform and arrest Bitzlato’s founder, a Russian citizen who reportedly knew that the criminal funds were linked to the platform.

The Treasury Department found that two-thirds of Bitzlato’s transactions with top counterparties were related to illegal activities. The Justice Department called the now-defunct crypto exchange a “China-based money-laundering machine” involved in a “high-tech axis of crypto-crime” and redoubled its determination to enforce regulation in the industry. Illegal crypto transactions hit an all-time high in 2022.

Reuters reported last year that Binance processed $10 billion related to criminal activity or companies attempting to circumvent US sanctions and reportedly processed $780 million for Hydra, a Russian dark web drug marketplace . Binance has refuted the claims.

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