Tracing firms say Binance’s claims of improving financial crime left out key stats
Binance Faces Scrutiny Over Selective Crime Stats Amid ICIJ Exposé
In the high-stakes world of cryptocurrency, where billions flow through digital ledgers every day, trust is everything. But when the International Consortium of Investigative Journalists (ICIJ) dropped its bombshell Coin Laundry investigation last month, it put the spotlight on Binance, the world’s largest crypto exchange. The report revealed hundreds of millions in suspect funds landing in Binance accounts—even after the exchange’s 2023 guilty plea to U.S. money laundering violations.
Binance quickly fired back with its own report, boasting a dramatic 96% drop in illicit activity since early 2023. They cited data from top blockchain analytics firms like Chainalysis and TRM Labs to claim superiority over competitors. However,
The Coin Laundry Investigation: Dirty Money in Crypto’s Spotlight
ICIJ’s global probe, involving 37 media partners, dove deep into cryptocurrency’s underbelly. It examined Binance during its U.S. court-mandated monitoring for anti-money laundering (AML) lapses. Key findings:
- Over $400 million from Cambodia’s Huione Group—a U.S. Treasury-flagged money laundering operation—flowed into Binance post-2023 guilty plea.
- Another $900 million from a platform used by North Korean hackers to launder stolen crypto hit Binance deposit accounts this year.
These aren’t isolated incidents. Crypto exchanges like Binance enable users to deposit, trade, and cash out crypto rapidly. Criminals exploit this speed, moving billions in illicit funds annually. Blockchain’s public nature helps, but anonymous wallet addresses make tracking tough.
Binance’s Bold Defense: A 96% Drop in Illicit Flows?
On November 17—the same day as ICIJ’s report—Binance published its transparency report. Highlights included:
- 96% reduction in direct exposure to illicit flows since early 2023, per Chainalysis data.
- In June 2025, just 0.007% of transaction volume linked to illicit wallets.
- Lowest crime exposure among top six exchanges, citing Chainalysis and TRM Labs.
Binance emphasized investments in compliance staff, tools, and controls. A spokesperson told investigators: “The decrease in illicit activity on our platform is a testament to the significant investments we have made.” They admitted the analysis excluded some categories but promised future expansions.
Chainalysis and TRM Labs Push Back: Missing Key Data Categories
Not so fast, said the analytics firms. Chainalysis issued a statement clarifying: “Chainalysis did not conduct the analysis. The data Binance used does not appear to include all categories of illicit activity that Chainalysis tracks.”
Hacks and ransomware were notably absent—categories needing specialized methodologies. TRM Labs’ Ari Redbord echoed this, noting their data covered only “limited categories” like illicit goods/services, scams, terrorist financing, sanctions, and ransomware subsets. The 0.016% figure for June? No hack funds included.
Redbord stressed: “Comparisons to other exchanges were not part of our analysis.” Both firms aligned in criticizing selective use of data. Chainalysis skipped further comment, but the message was clear: snapshots evolve as more wallet intel emerges.
Blockchain estimates of illicit activity can increase over time as firms uncover more wallet owners—anonymous code blocks turning into traceable leads.
How Blockchain Analytics Firms Fight Crypto Crime
Companies like Chainalysis and TRM Labs are crypto’s crime fighters. They scour public blockchains—immutable transaction ledgers—to link wallet addresses (crypto’s bank accounts) to real-world actors. Tools help exchanges flag suspect funds for compliance teams.
But they’re dual-edged: Watchdogs for regulators and law enforcement, yet contractors for exchanges tangled in scandals. Recent ICIJ coverage on Tether highlighted tensions—firms stood by findings linking a billion-dollar wallet to Huione despite client pushback.
Challenges in Measuring Crypto Illicit Activity
- Inconsistent Definitions: Hacks vs. scams? Not uniform across providers.
- Evolving Data: New intel rewrites histories.
- Selective Reporting: Exchanges cherry-pick stats for PR wins.
Binance insists its limited stats still show progress and welcomes fuller reviews with “consistent definitions.”
Binance’s Rocky History with Regulators
Binance isn’t new to scrutiny. Its 2023 plea admitted AML violations, paying billions in fines. Yet, post-plea flows from flagged entities persist, per ICIJ. This fuels debates: Is crypto inherently risky, or are exchanges lagging?
Broader industry stats paint a mixed picture. While total crypto crime hit record highs in 2024 (per Chainalysis reports), exchange exposure has trended down thanks to better tools. But omitting hacks—$2B+ stolen yearly—skews the narrative.
What This Means for Crypto Users and Investors
For everyday traders, this saga underscores due diligence. Platforms tout compliance, but verify the fine print. Look for:
- Full illicit category coverage in reports.
- Third-party audits, not self-analysis.
- Regulatory nods like U.S. monitoring compliance.
Regulators may tighten grips, demanding standardized metrics. Users risk frozen funds if wallets touch illicit chains unknowingly—a growing compliance headache.
The Path Forward: Transparency Over Hype
Blockchain’s transparency promise cuts both ways: Criminals hide, but ledgers expose. Firms like Chainalysis bridge the gap, but only if data isn’t sliced for optics.
In the end, this isn’t just about Binance. It’s a wake-up for crypto: Clean your ledgers, or regulators will. Stay tuned as the industry evolves—transparency wins.
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