FinCEN has Binance as a key counterparty receiving bitcoin from darknet marketplace Hydra as well as Bitzlato.
The United States Financial Crimes Enforcement Network (FinCEN) — a bureau of the Treasury Department — argues that Binance is connected to the illegal cryptocurrency platform Bitzalato
In an order published on Jan. 18, FinCEN said Binance cryptocurrency exchange is one of Bitzlato’s “top three client counterparties” in terms of bitcoin
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According to the authority, Binance received bitcoin from Bitzlato between May 2018 and September 2022. The biggest counterparties include Hydra, a Russia-linked darknet marketplace, and the alleged Russia-based Ponzi scheme known as “Fino,” FinCEN noted
FinCEN, on the other hand, did not mention Binance as a top three sender counterparty in the ranking. From May 2018 to September 2022, the largest bitcoin senders to Bitzalato were Hydra, Finland-based exchange LocalBitcoin and Finico, according to the document.
“Nearly two-thirds of Bitzlato’s top customer remittance counterparts are connected to darknet markets or scams,” FinCEN wrote in the order.The agency noted that between 2019 and 2021, Bitzlato scammed $206 million worth of crypto, scams, from darknet markets took $22.4 million from and $9 worth of crypto million from ransomware attackers obtained crypto
The Federal Bureau of Investigation arrested Bitzlato founder Anatoly Legkodimov in Miami on Jan. 17 as part of the case against Bitzlato, which came after U.S. authorities launched major enforcement actions against him, at the firm was charged with money laundering and allegedly facilitated the evasion of sanctions against Russia .
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Unlike major crypto-exchanges like Binance or Coinbase, Bitzlato was a lesser known cryptocurrency service. Founded in 2016, the platform reportedly has its office in the Federation Tower skyscraper in Moscow, accepting transactions of $100,000 or more
Binance’s alleged involvement in the Bitzlato case has raised some concerns about the exchange’s operations and potential ties to Russia. As previously reported, Binance was among the exchanges choosing to continue servicing rejected Russians after the European Union adopted its eighth sanctions package against the country
Related: Binance registers as a virtual asset service provider in Poland
Addressing Cointelegraph’s request for comment on FinCEN’s reference to Binance in the case of Bitzlato, a Binance spokesperson said the firm was cooperating with regulators and said:
“Binance is pleased to provide substantial assistance to international law enforcement partners in support of this investigation. This exemplifies Binance’s commitment to collaborating with law enforcement partners around the world.”
FinCEN did not immediately respond to Cointelgraph’s request for comment.
