FinCEN Accuses Binance of links to illegal cryptocurrency platform Bitzlato
2023.01.19 07:47
FinCEN Accuses Binance of links to illegal cryptocurrency platform Bitzlato
By Tiffany Smith
Budrigannews.com – The Treasury Department’s United States Financial Crimes Enforcement Network (FinCEN), a bureau, has argued that Binance is connected to the shady cryptocurrency platform Bitzlato.
The FinCEN stated in an order that was released on January 18 that the Binance cryptocurrency exchange was one of the “top three receiving counterparties” of Bitzlato in terms of transactions involving Bitcoin (BTC).
Between May 2018 and September 2022, the authority claims that Binance was one of the largest counterparties that received Bitcoin from Bitzlato. FinCEN noted that Hydra, a darknet market with ties to Russia, and the alleged “Finiko” Ponzi scheme, both based in Russia, were additional counterparts.
However, Binance was not listed as one of the top three sending counterparties by FinCEN. Between May 2018 and September 2022, the document indicates that Finiko and the Hydra, Finland-based exchange LocalBitcoins were the primary Bitcoin senders to Bitzlato.
FinCEN wrote in the order, “Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or scams.” Bitzlato received crypto worth $206 million from darknet markets, $224 million from scams, and $9 million from ransomware attackers, according to the agency.
The news comes as a number of U.S. authorities are taking significant enforcement actions against Bitzlato, accusing the company of laundering money and helping Russia circumvent sanctions. The Federal Bureau of Investigation made the arrest of Bitzlato founder Anatoly Legkodymov on January 17 in Miami as part of the case against Bitzlato.
Bitzlato was a little-known cryptocurrency service, in contrast to major crypto exchanges like Binance and Coinbase. The platform, which was established in 2016, is said to have an office in Moscow’s Federation Tower, where it accepts transactions of at least $100,000.
Concerns about the operations of the exchange and the possibility of ties with Russia are raised by the alleged involvement of Binance in Bitzlato’s case. Following the European Union’s adoption of the eighth package of sanctions against the nation, Binance was one of the exchanges that chose to continue serving non-sanctioned Russians, as previously reported.
A spokesperson for Binance stated that the company has been collaborating with regulators and responded to Cointelegraph’s request for comment regarding FinCEN’s reference to Binance in Bitzlato’s case, stating:
“Binance is pleased to have provided significant support for this investigation to partners in international law enforcement.” This shows how committed Binance is to collaborating with law enforcement partners worldwide.
