According to a Bloomberg report, Binance Holdings Ltd. has made top news in crypto trading as new developments, such as lax controls, have been witnessed over digital currency transactions.
As the matter evolves, reports have it that crypto transactions between terrorists and hackers, and even sanction violators, have employed Binance for a long time and managed to move digital assets worth billions of dollars.
The United States prosecution has confirmed this news, and the most interesting report has been that Binance’s lax controls give ISIS, Al-Qaeda, and Hamas room to trade Bitcoin on the platform. This comes hand in hand with the recent court case against the exchange and its CEO, Changpeng Zhao.
Binance regulatory loopholes proved an aid to terror sects
The Binance employees have been implicated in criminal activities and other misconducts, and the prosecution confirmed these activities were done knowingly. The court ruled that illegal transactions were allowed, and they implicated transactions to terrorists amid its ineffective anti-money laundering protocols.
This was reported by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the United States Department of Justice. The filing stated:
Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.
Treasury Secretary Janet Yellen said in a statement.
Here are the Terror finance reports
According to the United States, Binance enabled the following to occur as a result of those failures:
First, The al-Qassam Brigades, the military wing of Hamas, raised funds for the Palestinian resistance through Bitcoin transactions. The United States has designated Hamas as a terrorist organization. On October 7, the group assassinated over 1,200 Israelis. FinCEN claims that Binance neglected to submit suspicious activity reports to the United States regarding Hamas fundraising.
Secondly, FinCEN stated that Binance facilitated Bitcoin transactions with additional terrorist organizations, such as al-Qaeda and ISIS.
Thirdly, the company confessed that Iranian nationals executed at least 1.1 million transactions worth $899 million in violation of US sanctions.
Moreover, Binance acknowledged that exchange users in Syria, Cuba, and the Ukrainian regions of Crimea, Donetsk, and Luhansk conducted transactions worth millions of dollars in contravention of United States sanctions.
Here’s more: the company reported that $275 million was deposited by Binance users from BestMixer, a crypto platform that assisted in obscuring the digital money trail. 2019 Dutch authorities shut it down, claiming that it was “probably used to conceal and launder the criminal flows of money.”
In addition, Tens of millions of dollars were exchanged via Binance addresses in transactions involving twenty-four strains of ransomware, including SamSam, Satan, and WannaCry.
FinCEN stated that although the company collaborated with law enforcement upon being informed, it withheld vital information regarding the attacks from authorities. The United States charged three North Korean military hackers with WannaCry-related offenses in 2021.
FinCEN reported that over a thousand transactions occurred on three marketplaces specializing in child pornography and related content. In 2020, Dark Scandals, one of the sites in question, had an administrator indicted. The website featured videos of violent rape.
Finally, the company acknowledged that between 2017 and 2022, customers transmitted $106 million in Bitcoin from Hydra Market, a Russian darknet marketplace, to Binance wallets.
In 2022, German and American authorities seized Hydra’s servers, designating it the largest and most prominent darknet market in the world. The establishment also distributed counterfeit identification cards, malware software, and illicit substances, including heroin, cocaine, and LSD.
Legal battle between Binance and the US
According to the Tuesday Court filing, Changpeng Zhao, Binance’s Chief Executive Officer, recently pleaded guilty to allegations placed against him and his firm. The CEO admitted to failure to take basic steps in curbing money laundering schemes within the exchange’s network.
The prosecution stated that the platform is a bedrock for government officials to track the flow of money used in criminal activities on a global scale.
In accordance with the guilty plea and confirmation of the financial mishap, Binance is facing a settlement deal worth $4.3 billion. The court also ordered CZ to step down as CEO and pay a fine worth $50 million.
This implies that the crypto legend who made altcoin exchanges possible is now facing a prison sentence. Zhao will no longer run the world’s largest crypto.
The ruling confirmed CZ’s defeat, and its implications to Binance investors had been witnessed. This is based on the fact that order book liquidity tanked by 25% in the exchange platform.
