Binance Coin (BNB)

đź”´ High Risk

Binance’s money laundering scandal exposes the dark side of one of the world’s largest cryptocurrency exchanges, revealing systemic failures in compliance and AML controls. The exchange was found to have deliberately ignored regulatory obligations, facilitating billions of dollars in illicit transactions linked to ransomware, darknet markets, terrorist groups, and sanctioned countries. These failures not only compromised global financial security but also highlighted the urgent need for stronger oversight in the rapidly evolving crypto industry. Binance’s CEO’s guilty plea and record-breaking multi-billion dollar settlements mark a watershed moment in the fight against crypto-enabled financial crime, underlining that technological innovation cannot come at the expense of legal and ethical responsibility.

Binance, the world’s largest cryptocurrency exchange by trading volume, became the center of a monumental global money laundering and sanctions violation case spanning multiple countries. Investigations revealed Binance’s willful neglect of essential anti-money laundering protections, failure to implement robust Know Your Customer protocols, and suppression of suspicious activity reporting. This negligence provided a platform for criminals worldwide, including ransomware groups, terrorist organizations, and sanctioned entities, to process illicit funds using Binance Coin and other cryptocurrencies. The U.S. Treasury imposed the largest AML-related financial penalty in its history, and French authorities initiated criminal probes tied to drug trafficking money laundering. The case highlights critical regulatory challenges in policing rapidly evolving crypto markets and marked a significant enforcement milestone demonstrating global resolve against crypto-enabled financial crime.

Countries Involved

Multiple countries are implicated in the Binance case, including the United States, France, and jurisdictions under international sanctions such as Iran, North Korea, Syria, and Crimea. The U.S. led significant investigations and enforcement actions, while France initiated separate criminal inquiries. The global reach of Binance’s operations and its virtual currency exchange platform involved cross-border transactions exposing various countries to regulatory breaches. The U.S. Department of Treasury through agencies like FinCEN, OFAC, and IRS Criminal Investigation, along with French public prosecutors, actively pursued charges related to Binance’s activities across these territories. These multinational involvements illustrate the complex regulatory challenges posed by cryptocurrency exchanges operating globally without adequate compliance frameworks.

The investigation of Binance’s money laundering activities and related offenses came to public prominence from around 2021, with major enforcement actions reported in late 2023 and continuing through 2025. The U.S. Treasury announced a landmark settlement with Binance in November 2023, while French prosecutors’ money laundering probe surfaced prominently in January 2025. These timelines reflect a multi-year investigative process revealing systemic failures in Binance’s anti-money laundering (AML) and sanctions compliance programs over the preceding years. The breadth of the case signifies ongoing monitoring and enforcement as authorities uncover the full scope of illicit transactions facilitated by Binance.

Binance Coin (BNB), Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies processed on the Binance exchange were involved in money laundering schemes.

The crimes associated with Binance’s operations include money laundering, sanctions violations, terrorist financing, drug trafficking proceeds laundering, ransomware payments, and violations of the Bank Secrecy Act (BSA). The platform was exploited for layering illicit funds and masking their origins due to inadequate AML controls. The failure to report suspicious activity allowed significant flows of criminal proceeds through Binance’s wallets and accounts. The crimes also encompass regulatory violations such as operating an unregistered money services business (MSB) and systematic non-compliance with Know Your Customer (KYC) and AML regulations globally. These activities undermined the integrity of international financial systems and financing of terrorist organizations.

Key entities include Binance Holdings Ltd. and its affiliates, led by its founder Changpeng Zhao (CEO), who was reported to have supported policies suppressing compliance efforts. Other involved parties were illicit actors such as ransomware gangs, terrorist groups including Hamas’ Al-Qassam Brigades and ISIS, and darknet marketplace operators like Hydra. Regulatory bodies, including the U.S. Financial Crimes Enforcement Network (FinCEN), Office of Foreign Assets Control (OFAC), IRS Criminal Investigation, French Public Prosecutor’s Office, and international law enforcement agencies, played roles in investigation and enforcement. Binance’s internal entities, including compliance teams, were implicated for willful failures or suppression of suspicious activity reporting.

Yes, there is involvement of Politically Exposed Persons (PEPs) in the broader context of Binance’s facilitation of illicit transactions, especially with connections to sanctioned jurisdictions and entities. The platform enabled sanctioned individuals and organizations in countries like Iran and Syria to transact through Binance despite international sanctions. This exposure to PEPs was facilitated by Binance’s deficient AML and KYC standards, which allowed high-risk and high-profile politically exposed users to operate with minimal scrutiny. The failure to identify and report suspicious transactions involving PEPs aggravated regulatory violations and risks of corruption and terrorism financing.

Binance’s platform was exploited with several laundering techniques, including the use of anonymity-enhanced cryptocurrencies and mixing services to obscure transaction trails. The platform allegedly allowed tiered account structures, where Tier 1 customers could trade using only an email, bypassing robust KYC checks. Illicit actors leveraged these lax controls to layer funds via rapid deposits, trades, and withdrawals. Binance’s non-filing of Suspicious Activity Reports (SARs) enabled criminals to move large sums through ransomware payments, darknet marketplaces, and sanctioned parties without detection. The exchange also reportedly facilitated cross-border transfers that violated sanctions through direct wallet-to-wallet transfers.

While the exact total remains subject to ongoing investigation, reported figures indicate Binance facilitated laundering transactions totaling billions of dollars. For instance, one documented figure includes approximately $106 million in Bitcoin transfers linked directly to Hydra, a large darknet marketplace. Additionally, funds related to ransomware and mixing services accounted for over $275 million. The U.S. Treasury’s $3.4 billion settlement underlines the scale of monetary violations tied to Binance’s deficient anti-money laundering programs, suggesting the platform allowed laundering of extremely large sums over several years.

Analyses show Binance allowed transactions involving over 100,000 suspicious activities that were never reported to authorities. The lack of effective KYC meant that many users traded anonymously or under minimal identity verification, facilitating covert movement of criminal proceeds. Binance’s system vulnerabilities allowed sanctioned entities to operate alongside legitimate customers, and mixing services were utilized to blend illicit funds with legitimate transactions. The transaction flows often traversed multiple countries and currencies, complicating enforcement. Binance’s platform was used as a conduit for funds tied to terrorist groups and ransomware operators, undermining regulatory and financial controls worldwide.

In November 2023, Binance reached a historic $3.4 billion settlement with the U.S. Treasury’s FinCEN and an additional $968 million with OFAC for Bank Secrecy Act violations and sanctions breaches. The U.S. Department of Justice lodged charges against Binance and its founder for willful AML program failures. French prosecutors opened an investigation into money laundering linked to drug trafficking in early 2025. Binance was compelled to withdraw many services in the U.S. and globally tighten compliance requirements. Enforcement efforts also included regulatory fines, criminal charges against executives, and heightened scrutiny from multiple nations, representing one of the largest actions against a cryptocurrency exchange for financial crimes.

Binance Coin (BNB)
Case Title / Operation Name:
Binance Money Laundering and Sanctions Violation Case
Country(s) Involved:
Canada, France, Iran, Japan, Korea, North (North Korea), Syria, United Kingdom, United States
Platform / Exchange Used:
Binance cryptocurrency exchange, one of the world’s largest platforms enabling trading and transactions with Binance Coin (BNB) and other cryptocurrencies.
Cryptocurrency Involved:

Binance Coin (BNB), Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies processed on the Binance exchange were involved in money laundering schemes.

Volume Laundered (USD est.):
Estimated billions of USD laundered, including $1.6 billion linked to illicit actors identified by NY regulators and over $275 million from ransomware and darknet marketplaces. The total fine settlements exceeded $4 billion, underscoring the scale of laundering activity.
Wallet Addresses / TxIDs :
Specific wallet addresses and transaction hashes linked to darknet market Hydra, ransomware groups, and sanctioned entities; exact details are part of ongoing investigations by regulators.
Method of Laundering:

Techniques included inadequate KYC leading to anonymous or minimally verified accounts, the use of mixing services and tumblers, layering via rapid trades and wallet exchanges, cross-border transfers violating sanctions, and suppression of suspicious activity reporting (SAR).

Source of Funds:

Funds derived from ransomware payments, drug trafficking proceeds, terrorist financing (including Hamas and ISIS), darknet marketplaces like Hydra, fraud, and sanctioned nations evading financial controls.

Associated Shell Companies:

Investigations point to the use of various shell companies and business entities to obscure the origins of illicit funds, though specific named shell companies remain under investigation or confidential.

PEPs or Individuals Involved:

Politically Exposed Persons linked to sanctioned countries using Binance, including executives such as founder Changpeng Zhao (CZ) who pleaded guilty to AML compliance failures, and entities tied to sanctioned regimes and organized crime.

Law Enforcement / Regulatory Action:
Key actions include a historic $4.32 billion settlement with U.S. Treasury and DOJ in late 2023, criminal penalties against Binance and CEO, ongoing probes by French prosecutors, bans from multiple countries, and regulatory fines highlighting global enforcement efforts.
Year of Occurrence:
Major disclosures and enforcement actions occurred from 2021 through 2025, with settlements in late 2023 and ongoing legal scrutiny in 2024-2025.
Ongoing Case:
Ongoing
AML Network Risk Rating:
đź”´ High Risk
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