- The largest cryptocurrency exchange in the world, Binance, was identified as a counterparty in an order against the obscure cryptocurrency exchange, Bitzlato, which was charged by US authorities with laundering $700 million.
- The authorities emphasized that in addition to Binance, TheFiniko and Russian darknet Hydra were among the major receiving counterparties of Bitzlato.
- Following the adoption of the eighth round of sanctions by the European Union on Russia, Binance was one of the exchanges that decided to keep on serving non-sanctioned Russians.
The US Treasury Financial Crimes Enforcement Network identified Binance as one of Bitzlato’s top three receiving counterparties (FinCEN).
The largest cryptocurrency exchange in the world, Binance, was listed as a counterparty in an order against the obscure cryptocurrency exchange, Bitzlato, which was charged on Wednesday with attempting to launder $700 million.
On January 18, the US government initiated enforcement procedures against the obscure exchange. Anatoly Legkodymov, the exchange’s creator from Russia, was detained in Miami.
According to the FinCEN report, over two-thirds of Bitzlato’s top sending and receiving counterparties were connected to scams or darknet markets. The authorities said that in addition to Binance, TheFiniko and the Russian darknet service Hydra were among the main receiving counterparties of Bitzlato.
However, Binance was not included by FinCEN as one of the top three transmitting counterparties in the order. TheFiniko and Hydra, Finland-based exchange LocalBitcoins were the largest Bitcoin senders to Bitzlato between May 2018 and September 2022, according to the paper.
Bitzlato obtained cryptocurrency worth $206 million from darknet marketplaces between 2019 and 2021, $224 million from con artists, and $9 million from ransomware perpetrators. The corporation was officially designated by FinCEN as a main money-laundering concern, which often excludes a company from the global banking system.
The decision aims to forbid any domestic financial institution or all covered financial institutions from transmitting cash via Bitzlato since it has played a significant part in managing illegal transactions for Russian ransomware perpetrators.
Because Binance was one of the exchanges that decided to continue to provide services to non-sanctioned Russians after the European Union adopted the eighth sanctions package against the country, the exchange’s alleged involvement in Bitzlato’s case raises some questions about the exchange’s operations and potential ties with Russia.
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