FinCEN placed Binance next to the darknet market Hydra as a major counterparty receiving Bitcoin from Bitzlato.
The US Financial Crimes Enforcement Network (FinCEN) – an agency of the Treasury Department – has announced that Binance is linked to the illegal cryptocurrency platform Bitzlato.
In the order issued on Jan. 18, FinCEN said cryptocurrency exchange Binance is among Bitzlato’s “top three receiving counterparties” in the process of Bitcoin BTC ($20,722) business.
According to the authority, Binance was among the largest partners that received Bitcoin from Bitzlato between May 2018 and September 2022. Other groups include Hydra, a Russian-linked darknet market, and an alleged Russian Ponzi scheme called “Finiko”, FinCEN said.
On the other hand, FinCEN did not mention Binance as one of the three main issuers of the system. According to the document, the largest Bitcoin and Bitzlato between May 2018 and September 2022 are Hydra, Finnish exchange LocalBitcoins, and Finiko.
FinCEN wrote in the order, “Approximately two-thirds of the principals receiving and sending Bitzlato affiliates are connected to the black market or fraud. The agency said that between 2019 and 2021, Bitzlato received $206 million in crypto from the darknet market, $224 million from fraud, and $9 million from ransomware attacks.
The news comes as a number of US authorities are launching major enforcement actions against Bitzlato, accusing the company of money laundering and allegedly facilitating the evasion of sanctions against Russia. In connection with the case against Bitzlato, the Federal Bureau of Investigation arrested Bitzlato founder Anatoly Legkodymov on January 17 in Miami.
Unlike major crypto exchanges like Binance or Coinbase, Bitzlato is a small, well-known cryptocurrency service. Founded in 2016, it is reported that the platform has an office in the Federation Tower skyscraper in Moscow, where it accepted transactions of $ 100,000 or more. Binance’s involvement in the Bitzlato case raises some concerns about the exchange’s operations and potential ties to Russia. As previously reported, Binance is one of the exchanges that chose to continue serving Russians without authorization after the European Union passed the eighth order against the country. In response to Cointelegraph’s request for comment regarding FinCEN’s reference to Binance and the Bitzlato case, a Binance spokesperson said the company is working with regulators, saying:
“Binance is pleased to provide significant assistance to international law enforcement partners in support of this investigation. This demonstrates Binance’s efforts to work with law enforcement partners around the world.”
FinCEN did not immediately respond to Cointelegraph’s request for comment. In response to Cointelegraph’s request for comment regarding FinCEN’s reference to Binance and the Bitzlato case, a Binance spokesperson said the company is working with regulators, saying:
“Binance is pleased to provide significant assistance to international law enforcement partners in support of this investigation. This demonstrates Binance’s efforts to work with law enforcement partners around the world.”
FinCEN did not immediately respond to Cointelegraph’s request for comment. In response to Cointelegraph’s request for comment regarding FinCEN’s reference to Binance and the Bitzlato case, a Binance spokesperson said the company is working with regulators, saying:
“Binance is pleased to provide significant assistance to international law enforcement partners in support of this investigation. This demonstrates Binance’s efforts to work with law enforcement partners around the world.”
FinCEN did not immediately respond to Cointelegraph’s request for comment.
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