FinCEN lists Binance among the top Bitcoin counterparties to Bitzlato
The United States Financial Crimes Enforcement Network (FinCEN) – an agency of the Treasury Department – has claimed that Binance is linked to the illegal cryptocurrency platform Bitzlato.
In an order published on January 18, FinCEN stated that the Binance cryptocurrency exchange was among the “top three receiving counterparties” of Bitzlato in terms of Bitcoin (BTC) transactions.
According to the authority, Binance was among the largest counterparties to receive Bitcoin from Bitzlato between May 2018 and September 2022. Other counterparties included the Russian-linked darknet marketplace Hydra and the alleged Russia-based Ponzi scheme known as “Finiko,” FinCEN noted.
On the other hand, FinCEN did not mention Binance as the top three sending counterparties in the order. According to the document, the biggest Bitcoin senders to Bitzlato between May 2018 and September 2022 were Hydra, Finland-based exchanges LocalBitcoins and Finiko.
“Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or fraud,” FinCEN wrote in the order. The agency noted that between 2019 and 2021, Bitzlato received $206 million worth of crypto from darknet markets, $224 million from fraud and $9 million from ransomware attackers.
The news comes amid several US authorities initiating major enforcement actions against Bitzlato, accusing the firm of money laundering and allegedly facilitating the circumvention of sanctions against Russia. As part of the case against Bitzlato, the Federal Bureau of Investigation arrested Bitzlato founder Anatoly Legkodymov on January 17 in Miami.
Unlike major crypto exchanges like Binance or Coinbase, Bitzlato was a little-known cryptocurrency service. Founded in 2016, the platform reportedly has an office in the Federation Tower skyscraper in Moscow, where it accepted transactions of $100,000 or more.
The alleged involvement of Binance in Bitzlato’s case raises some concerns about the exchange’s operations and potential ties to Russia. As previously reported, Binance was among the exchanges that chose to continue serving non-sanctioned Russians after the EU adopted the eighth package of sanctions against the country.
Related: Binance registers as virtual asset service provider in Poland
A spokesperson for Binance addressed Cointelegraph’s request for comment regarding FinCEN’s reference to Binance in Bitzlato’s case that the firm has cooperated with regulators, stating:
“Binance is pleased to have provided significant assistance to international law enforcement partners in support of this investigation. This exemplifies Binance’s commitment to cooperating with law enforcement partners worldwide.”
FinCEN did not immediately respond to Cointelegraph’s request for comment.
