According to Reuters, Binance made Bitcoin transactions for the cryptocurrency exchange Bitzlato, which the US Department of Justice seized last week for laundering funds linked to Russian financing.
Binance transfers $346 million for seized crypto exchange Bitzlato
Global news agency Reuters, in a report with Chainalysis published on Jan. 24, claimed that Binance had processed approximately $346 million in Bitcoin for the seized crypto exchange Bitzlato for allegedly running a “money laundering engine.” On January 18, the US Department of Justice accused Bitzlato’s co-founder and majority shareholder, Anatoly Legkodymov, of operating unlicensed exchanges and illegal funds.
Binance was among Bitzlato’s top three counterparties in terms of the amount of Bitcoin received between May 2018 and September 2022, according to a statement by the US Treasury Financial Crimes Enforcement Network (FinCEN) last week. In a joint study with Chainalysis, Reuters suggested that Binance has processed $345.8 million worth of Bitcoin for Bitzlato.
According to a review of previously unreported data, Binance moved more than 20,000 Bitcoins worth $345.8 million between May 2018 and last week’s close when they traded approximately 205,000 transactions for Bitzlato. According to the data, around $175 million worth of Bitcoin was transferred from Bitzlato to Binance at that time, making the exchange the largest buyer.
According to data from Chainalysis, nearly $90 million of total transfers occurred after August 2021, when Binance said users would need to present ID to fight financial crime. Binance said in a blog last year that such controls combat “financing and laundering of money from illegal activities.” The new allegations come shortly after CEO CZ shared a lengthy flood of lamentation over the FUD news:
Why do people FUD about @Binance?
A few (non-exhaustive) reasons. Thread 1/98
— CZ 🔶 Binance (@cz_binance) December 23, 2022
The Justice Department and FinCEN declined to comment.
cryptocoin.com As you follow, Binance was recently under the spotlight on a cryptocurrency laundering charge going back to 2018. US action against Bitzlato comes with the Justice Department investigating Binance for possible money laundering and sanctions violations. In December, some federal prosecutors concluded that the evidence gathered justified lawsuits against executives, including founder and CEO Changpeng Zhao.
Chainalysis, which is used by US authorities to monitor illegal crypto streams, warned in February last year that Bitzlato was high risk. Chainalysis said in a report that about half of Bitzlato’s transfers between 2019 and 2021 were “illegal and risky,” with nearly $1 billion detected in such transactions. Different reports, based on blockchain data, suggest that Binance has processed at least $10 billion in payments to criminals and companies seeking to evade US sanctions.
