Binance Faces Fresh Lawsuit Over Money Laundering Allegations In US
The new charge accused the company and its founder, Changpeng Zhao, of enabling widespread money laundering and violating U.S. financial regulations.
Aglobal crypto trading platform, Binance has been hit with a new class action lawsuit in the U.S. Western District Court of Washington over money laundering allegations.
The new charge accused the company and its founder, Changpeng Zhao, of enabling widespread money laundering and violating U.S. financial regulations.
It was learnt that the lawsuit, brought by former exchange users Philip Martin, Natalie Tang, and Yatin Khanna and filed Friday, alleged that Binance’s negligent compliance practices allowed bad actors to use the platform to launder stolen crypto, causing significant financial harm to U.S. users.
The complaint detailed how Binance, under Zhao’s leadership, allegedly operated as an unlicensed money-transmitting business, willfully ignoring anti-money laundering requirements and facilitating transactions that helped criminals obscure the origins of illicit funds.
According to the plaintiffs, Binance’s rapid ascent to becoming the world’s largest crypto exchange was fueled by its deliberate evasion of U.S. regulations, which would have otherwise curbed its access to the lucrative American market.
The lawsuit also alleges that Zhao, who founded Binance in 2017, prioritized profits over legal compliance, creating an environment where U.S. users were encouraged to bypass the platform’s minimal compliance checks.
The plaintiffs claim that Binance’s failure to implement robust AML and Know Your Customer protocols turned the exchange into a hub for laundering crypto, often stolen through hacks and other illicit activities.
Meanwhile, Binance on Tuesday announced that it prevented over $2.4 billion in potential user losses from suspected scams and fraudulent activities in the first seven months of 2024.
This was stated in a long statement released on its official website dated 20th of August, 2024, mentioning that the company’s sophisticated internal risk engine, which leverages artificial intelligence (AI) and manual review, detected and flagged suspicious transactions across the platform, safeguarding over 1.2 million users.
The majority of prevented losses, approximately $1.1 billion, were linked to suspected crypto scams during the crypto withdrawal stage, according to the statement.
