The cryptocurrency exchange Binance was listed as a counterparty in a case related to the trading platform Bitzlato. According to FinCEN (the U.S. Treasury Department's Financial Crimes Enforcement Network), it was one of the main recipients and senders linked to Bitzlato, which is believed to have laundered $700 million.
The study found that two-thirds of Bitzlato's most important trading partners are associated with dark web markets or fraud. Of all the bitcoins that were obtained between May 2018 and September 2022, the top three were Binance, VASP, Hydra (linked to Russia), and TheFiniko (a Russian pyramid money system).
The report also states that Hydra, LocalBitcoins and TheFiniko were the three largest organizations making money transfers during the same period.
A Binance representative stated that they can assist international law enforcement agencies in this investigation, which is proof of their desire to cooperate with financial regulators around the world.
Local Bitcoin and TheFiniko declined to comment on this issue. According to FinCEN, Bitzlato is considered a "major money laundering enterprise," which prohibits any transfers related to it by any local financial institution.
Further investigation revealed that Bitzlato's activities had significant links to other illegal activities, such as darknet markets and fraud in Russia, leading to the arrest of its Russian founder, Anatoly Legkodymov, in Miami on January 18, 2023.
