The world’s largest crypto exchange by volume and its founder are being named as defendants in a new money laundering lawsuit.
According to a new class action, Binance willfully neglected to register itself with the proper authorities and failed to maintain adequate anti-money laundering protocols as a means of earning profits from the US markets.
According to the lawsuit, Binance’s actions lead Binance.com to be a “hub” for criminals looking to wash money.
“Defendants’ willful disregard of important laws and regulations turned Binance.com into a magnet and hub for criminals, users from sanctioned jurisdictions, terrorists and other bad actors, because Binance.com became a critical part of their efforts to launder crypto which was stolen or obtained by other unlawful means.
Binance.com became a preferred-choice as the ‘get-away driver’ for a large number of bad actors.”
The lawsuit goes on to allege that Binance and its founder Changpeng Zhao put profits over the law and offered bad actors a way to obfuscate their crimes.
Furthermore, it’s alleged that Binance.US, the US branch of the exchange, was created for no other reason than to distract US regulators.
According to Bill Hughes, a lawyer with blockchain software firm Consensys, the suit will most likely not go to trial as Zhao will ultimately look to settle. Hughes says a massive on-chain analysis campaign will likely ensue if it does go to trial.
“If this case goes far into discovery and even to dispositive pre-trial motions (it probably won’t – CZ gonna open up that wallet and make it go away at some point), then the efficacy of blockchain analytics itself and on-chain asset recovery will be on trial! (cc: FBI, HSI, IRS-CI, Chainalysis, TRM, Merkle, Elliptic et al.)
Oh the things that Binance would be incentivized to say about tracing and recovery – kinda a tough position to be in, honestly, if you care anything about the industry.”
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