Accused of processing $2.35 billion in illicit transactions, Binance defends itself

According to a Reuters investigation, Binance processed $2.35 billion in transactions from investment fraud, hacks and illegal drug sales.

Binance wants to have its say. On Tuesday, Reuters published an investigation claiming that Binance processed $2.35 billion in transactions stemming from investment fraud, hacks and illegal drug sales. The facts allegedly took place between 2017 and 2021, before Binance implemented measures to combat money laundering.

In reaction to the publication of this investigation, Binance published a response on its blog considering that the Reuters investigation was based on “weak data that could have been verified”.

“Neither our industry nor Binance are perfect, but we’ve grown by leaps and bounds over the past three years. Crypto is a completely new innovation. And like many regulators and policymakers, we’re still thinking about this what an appropriate regulatory framework should be,” the post read.

To defend itself, Binance cites in particular the latest report from the specialized company Chainalysis, according to which 0.15% of transactions carried out with cryptocurrencies in 2021 were associated with illicit activities. According to the report, this figure was 0.62% in 2020 and 3.37% in 2019. “Crypto is incredibly transparent, infinitely more so than the traditional monetary economy, and this is well documented. So tell us where is the real money laundering problem?” Binance points out.

Reuters had clarified in its investigation that email exchanges were made between Patrick Hillmann, Binance’s chief communications officer, and Reuters journalists, before publishing this investigation.

In its post, Binance published these exchanges (or part of it) that took place between May 23 and May 30. On many points, we see that the two entities did not manage to agree, and in particular on the figures mentioned by Reuters. For example, according to Reuters, Binance was allegedly used to make and receive $780 million in cryptocurrency payments through a darknet site, called Hydra.

The head of communications considered this figure to be “inaccurate and exaggerated”.

“Furthermore, you confuse ‘direct’ and ‘indirect’ exposure and include data relating to deposits, whereas a platform can only be held responsible for what it does after a potentially illicit deposit For example, imagine that a drug dealer approaches your house and slips a bag of illicit material into your mailbox. it is your responsibility to do the right thing by contacting law enforcement and providing them with the information they need to catch the perpetrator,” Hillmann said in the email exchange.

In the email exchange, Binance said it had spent “tens of millions of dollars” recruiting a team of 120 cybersecurity specialists.

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