Binance’s Troubling Transactions
Recent disclosures suggest that Binance, one of the world’s largest cryptocurrency exchanges, facilitated the movement of $1.7 billion through various accounts that raised red flags for suspicious behavior, amidst a significant $4.3 billion settlement with U.S. regulators in 2023. According to internal documents examined by the Financial Times, despite the platform’s deal with the U.S. Justice Department in November 2023, numerous accounts that had previously been identified as risky continued to engage in trading activities.
Suspicious Account Activity
The documentation reviewed by the Financial Times revealed that transactions on these flagged accounts dated back to 2021 and extended up to 2025. Alarmingly, one particular account connected with an individual residing in a Venezuelan slum reported moving around $93 million during a four-year span, with funds that were traced back to networks facing U.S. allegations of facilitating covert financial transactions for Iran and the militant group Hizbollah.
Furthermore, another concerning case involved an account linked to a 25-year-old Venezuelan woman, which received an astounding $177 million in cryptocurrency over just two years. This account displayed unusual behavior, changing its banking information a staggering 647 times within 14 months, utilizing nearly 500 different accounts across various countries.
Investigation Findings
The investigation concluded that the 13 risky accounts collectively processed a striking $1.7 billion, with about $144 million transacted post-settlement. Ex-U.S. federal prosecutor Stefan Cassella remarked that the patterns of activity observed bore resemblance to those typical of unlicensed money transmission operations.
Notably, the financial records indicated instances of login attempts that seemed improbable, with one linked to a Venezuelan bank employee accessing an account from Caracas, Venezuela, only to have logins occur from Osaka, Japan, the following day, raising concerns about possible account theft or coordinated misuse.
Links to Terrorism Financing
Additionally, several accounts were found to have transferred funds in the stablecoin Tether from wallets that had previously been frozen by Israeli authorities in adherence to anti-terrorism laws. Many of these transactions were traced to wallets affiliated with Tawfiq Al-Law, a Syrian national implicated in facilitating financial movement for Hizbollah and Iran-aligned Houthi forces. Relevant accounts were seized by Israel in 2023, and the U.S. Treasury imposed sanctions against Al-Law in 2024.
Binance’s Response and Regulatory Challenges
In response to these alarming reports, Binance asserted its commitment to adhering to compliance protocols and emphasized its zero-tolerance stance on illicit activities, highlighting systems in place to monitor and probe suspicious transactions.
The emergence of these issues coincides with increased scrutiny of Binance’s operational governance, particularly following the pardon of its founder, Changpeng Zhao, by the former U.S. president in October for anti-money laundering infractions. This pardon and subsequent business connections between Zhao’s family and Binance-related firms have complicated regulatory oversight. Notably, much of the activity highlighted occurred after independent monitors were appointed in 2024, as indicated by the Financial Times.
The combination of these revelations represents a substantial challenge for Binance as it navigates regulatory landscapes while facing serious allegations of facilitating financial activities that could be tied to terrorist financing operations.
