Binance accused of money laundering?

Fri 30 Jul 2021 ▪ 17h40 ▪ 3 min read — by Felix Meyer

Binance saga seems to be in full swing! The world’s largest exchange has reportedly become a subject of yet another probe, this time conducted by India’s Enforcement Directorate (ED) which is currently looking into money laundering cases involving betting apps.

WazirX under investigation

India’s anti-money laundering watchdog is currently probing Binance Holdings Ltd. for its alleged connection with Chinese-run betting apps. Over $134 million (~£96 million) have been laundered in the past 10 months partly through WazirX, a crypto exchange which has been a part of Binance Holdings Ltd. since 2019.

According to The Economic Times, the operators of Chinese betting apps have been using WazirX wallets to buy and convert crypto assets and transfer them to Binance accounts. ED has given WazirX a notice worth 27.9 billion rupees (~£268.7 million) over allegedly going against the rules of transaction management involving digital assets.

It has come to light that Binance didn’t request all the necessary Know Your Customer (KYC) documents for the majority of transactions, as India’s anti-money laundering agency reports. Moreover, the crypto exchange didn’t collect any data regarding operations with digital currencies, which is required by the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog.

It’s not the first time Binance has been caught in the limelight in the past couple of weeks. The exchange is no longer permitted to undertake any unregulated activity in particular jurisdictions. It has also come under rigorous regulatory scrutiny for breaking securities laws and is now in the middle of criminal investigations initiated by its users.

Binance is open for cooperation

Changpeng Zhao, founder and CEO of Binance, assures that the company has never intended to bypass any local legislations. CZ added that Binance is open for cooperation with financial regulators and is going to work towards full compliance with local requirements. In order to achieve that, the company has beefed up security staff and got focused on legal matters. 

In the meantime, the crypto exchange has drastically decreased a withdrawal limit for unverified users and has launched a special API tool so as to enable traders to track their transactions and facilitate tax reporting.

The latest clampdowns combined with key partners cutting ties with Binance have come as a severe blow to the exchange. Having attracted so much attention from watchdogs in various countries, Binance is now swiftly and firmly moving towards full regulatory compliance. All that’s left for us to do is wait for the next manoeuvre!

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Felix Meyer avatar
Felix Meyer

Le trading et l'analyse technique sont mes spécialités depuis 4 ans. Je décortique le marché et vous partage mon expertise.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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