• US law enforcement agencies are investigating Binance crypto exchange for not complying with sanctions and facilitating money laundering.
• An order revealed that Binance allegedly received funds from Bitzlato, a crypto exchange currently facing money laundering charges.
• US authorities arrested Bitzlato founder Anatoly Legkodymov after it was discovered that he had laundered 700 million USD through Binance.
US law enforcement agencies have been investigating the Binance crypto exchange for allegedly not complying with sanctions and facilitating money laundering. Recently, an order from the US Financial Crimes Enforcement Network (FinCEN) revealed that Binance allegedly received some large chunks of money from Bitzlato, a crypto exchange currently facing money laundering charges.
The order further revealed that a Russian named Anatoly Legkodymov, founder of Bitzlato, supposedly laundered 700 million USD through Binance. It was also stated that these funds were used for illegal activities such as gambling and purchasing illicit drugs through the dark web. The US authorities arrested Legkodymov on Tuesday after the discovery.
The US Treasury Department noted that two-thirds of Bitzlato’s highest transaction counterparts conducted illegal activities or scams. They also claimed that Binance was Bitzlato’s highest Bitcoin-receiving ally between May 2018 and September 2022, receiving more Bitcoin from the criminal exchange than the other allies.
The counterparts of Bitzlato included TheFiniko, a Russian Ponzi Scheme, and a Russian dark net market named Hydra. The Financial Crime Enforcement Network said that Binance failed to take necessary steps to stop the transactions and failed to properly report the suspicious transactions.
The US Department of Justice is now scrutinizing the Binance exchange and further investigations are being conducted to find out if the exchange was truly involved in money laundering activities. This news has sent shockwaves throughout the crypto community and has raised questions on the safety and security of crypto exchanges.