Binance reportedly failed to prevent hundreds of millions of dollars in cryptocurrency from flowing through suspicious accounts after reaching a landmark $4.3 billion U.S. criminal settlement in 2023 and promising to improve compliance. The Financial Times (FT) investigated internal Binance documents detailing thousands of transactions. The investigation revealed that the accounts continued to trade despite multiple red flags, including irrational login patterns and failed authentication.
It is reported that many accounts continued to trade even after Binance reached a plea agreement with the United States, and their behavior is considered by experts to be enough to trigger account freezes or investigations in regulated financial institutions.
These suspicious behaviors include:
Transfer tens or even hundreds of millions of dollars in unusual patterns;
Accounts were logged in from both ends of the world within hours.
The disclosure of relevant transaction details comes as U.S. President Trump pardoned Binance founder Changpeng Zhao in October, who had previously been criminally liable for deliberately violating U.S. anti-money laundering laws. Subsequently, the Trump family decided this month to expand its business partnership with exchanges owned by Changpeng Zhao.
Jeffrey Simser, a lawyer who specializes in anti-money laundering regulation, said the findings about Binance account activity were "very disturbing allegations." He previously worked for 30 years in the Attorney General's Department of Ontario, Canada.
"I can't imagine any U.S. bank allowing this to happen without a huge shock," he said.
Binance said it "maintains strict compliance controls and has a zero-tolerance approach to illegal activity on the platform," adding that the company has established "robust systems for flagging and investigating suspicious transactions and taking action where appropriate, including restricting accounts in accordance with regulatory obligations."
Binance has 300 million users who trade digital tokens and “stablecoins” pegged to real-world currencies.
Binance has rebounded since 2023 after pleading guilty to criminal charges related to money laundering, violating banking laws, and violating international financial sanctions and paying a record $4.3 billion fine.
Trump’s self-proclaimed “cryptocurrency president” contrasts with the Biden administration’s stance on the risks of digital currencies, such as fraud, criminal activity and highly volatile speculation. Crypto asset prices have surged since Trump won the election a year ago.
According to the plea agreement in November 2023, Binance promised to strengthen compliance, transaction monitoring, and sanctions control measures.
However, internal Binance data reviewed by the FT from 2021 to this year cast doubt on the actual effectiveness of these reform measures.