Japanese cryptocurrency exchange sues Binance for facilitating Bitcoin laundering
By Bob Garcia
Binance, one of the world’s best-known cryptocurrency exchanges, is being sued by Fisco in U.S. court. According to the 33-page complaint filed in the Northern District of California, the Japanese cryptocurrency exchange alleges that Binance facilitated the laundering of over $9 million worth of stolen blockchain assets.
Fisco argues that Binance’s insufficient KYC (Know Your Customer) policies made it simple for thieves to unload cryptocurrency stolen from Fisco’s Zaif exchange. Hackers had previously stolen $63 million of bitcoin and other crypto from Zaif in a September 2018 hack. According to Fisco’s complaint, hackers were able to use Bitcoin to launder 1,451.7 bitcoin, which was then valued at $9.4 million. 1,451.7 bitcoin is valued at $15.69 million today.
Fisco also alleges that Binance’s AML (anti-money laundering) measures are insufficient and fail to meet industry standards. Unlike most sites, Binance enabled users to create accounts and exchange up to two bitcoins without the need for government ID. The complaint states, “The thieves broke the stolen bitcoin into thousands of separate transactions and accounts, all valued below the 2-bitcoin threshold.” The statement further claims that, “Binance served as both a receptacle and transmitter of criminal funds.”
Despite contacting Binance following the hack and asking them to freeze the offending accounts, the company refused to get involved. According to the filings, “Binance either intentionally or negligently failed to interrupt the money laundering process when it could have done so.”
Fisco and Zaif are in the process of seeking a jury trial and $9 million plus interest from the defendant. Binance has not issued a response to the allegations at press time.