Binance exchange accused of facilitating money laundering

Japenese digital currency exchange, Fisco has accused Binance Holdings of allowing money laundering through its exchange platform. Fisco claimed that the BINANCE exchange was operating with inadequate Anti-money laundering measures, which made it an ideal platform for the bad actors to cash out. The Japanese exchange seeks relief from Binance.

Fisco blames Binance exchange for lax security measure

On Monday, Fisco filed the complaint against Binance with the US District Court of the Northern District of California. The Japanese exchange explained in the complaint that the money laundered through Binance exchange was part of the digital currencies stolen from Zaif, another crypto exchange based out of Japan.

Per the document, about $63 million worth of cryptos was stolen from Zaif by hackers in 2018. The stolen funds were traced to one address via the Bitcoin blockchain, from which the hackers laundered 1,451.7 BTC after sending them to the Binance exchange. At the time, the money laundered amounted to $9.4 million.

Fisco claimed it was deliberate

Fisco argued that the Binance exchange had low-standard anti-money laundering measures, which made it possible for the hackers to cash out easily. The complaint precisely reads:

There is a simple reason why the thieves laundered the digital loot they stole through Binance: despite being one of the world’s largest cryptocurrency exchanges, Binance’s “know your customer” and anti-money laundering protocols are shockingly lax and do not measure up to industry standards.

In addition, Fisco accused Binance of deliberately allowing the funds to be withdrawn, despite knowing that those funds were stolen from Zaif. Fisco said that Binance had the ability to freeze the funds, but neglected to do so. Consequently, Zaif and its customers had to suffer the loss.

Fisco purchased the Zaif exchange after it was compromised. Following the complaint document, Fisco wants relief from Binance, and to also cover for the restitution, including expectancy damages, and compensatory damages, based on the court’s decision.