A compliance employee of Binance—the world’s largest cryptocurrency exchange—allegedly wrote: “We need a banner ‘is washing drug money too hard these days—come to Binance we got cake for you.”

According to court documents, Binance launched in 2017, at the heels of  the shuttering of Bulgaria-based bitcoin exchange BTC-e. It emerged as the largest digital asset platform in the world replacing BTC-e by prioritizing growth and profits over compliance with US laws by not implementing the core components of an effective anti-money laundering (AML) program with comprehensive know-your-customer (KYC) protocols or systematically monitoring transactions or filing a suspicious activity report (SAR) with FinCEN, a US financial watchdog.

Instead, Binance focused on attracting high-volume US-based customers allowing them to open accounts and trade trillions of dollars in transactions on the platform, without submitting any identifying information beyond an email address. As Attorney General Merrick B. Garland explained:

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed.”

Binance served US customers and was required to register with FinCEN as a money services business and implement an effective AML program to prevent money laundering; prevent US customers from conducting transactions with customers in sanctioned jurisdictions. Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington said:

“From the beginning of its existence, Binance and founder Changpeng Zhao chose growth and personal wealth over following financial regulations aimed at stopping the laundering of criminal cash.”

Binance’s failure to implement an effective AML program

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Author: Selva Ozelli

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