In an order published on Jan. 18, FinCEN stated that the Binance crypto currency exchange was among the ‘top three receiving counterparties’ of Bitzlato in terms of Bitcoin transactions
The US Financial Crimes Enforcement Network (FinCEN) has argued that Binance is connected to the illegal crypto currency platform, Bitzlato.
In a Jan. 18 order, FinCEN, a bureau of the Treasury Department, stated that the Binance crypto currency exchange was among the ‘top three receiving counterparties’ of Bitzlato in terms of Bitcoin transactions.
Binance was among the biggest counterparties that received Bitcoin from Bitzlato between May 2018 and September 2022, according to the bureau. Other counterparties included Russia-connected Hydra and the alleged Russia-based Ponzi scheme known as ‘Finiko’.
Hydra, Finland-based exchange LocalBitcoins and Finiko were the biggest Bitcoin senders to Bitzlato between May 2018 and September 2022, according to the document.
According to Arkham Intelligence, the highest crypto balance of Bitzlato was valued at a mere $6.6 million, while the highest balance of Binance was valued at more than $60 billion.
Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are connected with darknet markets or scams, the bureau wrote in the order. The crypto currency platform received crypto worth $206m from darknet markets, $224m from scams, while ransomware attackers contributed $9 million between 2019 and 2021, the agency noted.
The news comes as a number of U.S. authorities are accusing the firm of money laundering and allegedly facilitating circumvention of sanctions against Russia. As part of the case against Bitzlato, the FBI arrested Bitzlato founder Anatoly Legkodymov on Jan. 17.
Unlike other large crypto exchanges such as Binance or Coinbase, Bitzlato was a little-known crypto currency service. The platform was founded in 2016, and reportedly has an office in the Federation Tower skyscraper in Moscow, where it accepted transactions of $100,000 or more.
The alleged involvement of Binance in Bitzlato’s case raises concerns about the exchange’s operations and potential ties with Russia. Binance was among exchanges that continued to serve non-sanctioned Russians after the EU adopted sanctions against that country.
