FinCEN Calls Binance the Top BTC Counterparty of Bitzlato

  • January 25, 2023

FinCEN believes that Binance received the most amount of Bitcoin (BTC) from Bitzlato between May 2018 and September 2022.

The United States Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury that collects and analyzes financial transaction information, has claimed that crypto exchange Binance is tied with the illegal crypto platform Bitzlato.

According to the order issued on January 18th, FinCEN believes that Binance was one of the “top three receiving counterparties” of Bitzlato Bitcoin (BTC) transactions.

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FinCEN distinguished Binance, Russia-connected darknet market Hydra and Russia-based Ponzi scheme “TheFiniko,” as parties that received the most amount of BTC between May 2018 and September 2022.

It is worth noting that FinCEN did not disclose the specific amount of BTC transferred to each counterparty.

In response to FinCEN’s allegations, a Binance spokesperson noted:

Binance is pleased to have provided substantial assistance to international law enforcement partners in support of this investigation. This exemplifies Binance’s commitment to working collaboratively with law enforcement partners worldwide.

In its order, FinCEN did not mention Binance among “Bitzlato’s top three sending counterparties.” Based on the document, the biggest senders were Hydra, Finland-based exchange LocalBitcoins, and Finiko.

FinCEN believes that “two-thirds” of Bitzlato’s top counterparties are connected with scams or darknet markets.

The bureau of the US Treasury believes that between 2019 and 2021, Bitzlato collected $439 million worth of crypto. More than half of crypto was allegedly obtained from darknet markets, 47% from scams, and 2% from ransomware attacks.

In the order, FinCEN prohibits financial institutions from “engaging in a transmittal of funds from or to Bitzlato, or from or to any account or CVC address administered by or on behalf of Bitzlato.” The action comes into effect on February 1st, 2023.

It is worth noting that multiple law institutions in the United States are launching investigations into Bitzlato. US authorities are accusing Bitzlato of facilitating the circumvention of sanctions against Russia and money laundering. Following the launch of multiple probes, on January 17th, the Federal Bureau of Investigation arrested Bitzlato founder Anatoly Legkodymov.

Gile K. - Crypto Analyst

by Gile K. – Crypto Analyst, BitDegree

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