Despite reaching a landmark settlement with US authorities, Binance reportedly continued processing hundreds of millions of dollars through accounts marked for suspicious activity, according to a Financial Times investigation. The revelation raises serious questions about the exchange's commitment to regulatory compliance and the effectiveness of oversight measures imposed after its historic $4.3 billion settlement.
A damning Financial Times report has revealed that Binance, the world's largest cryptocurrency exchange, continued to allow hundreds of millions of dollars to flow through accounts flagged for suspicious activity even after reaching a comprehensive settlement with United States authorities in late 2023.
The findings cast a shadow over Binance's public commitments to enhanced compliance and regulatory cooperation following its $4.3 billion settlement with the Department of Justice and other federal agencies. That agreement, announced in November 2023, was supposed to mark a turning point for the exchange, which had faced years of scrutiny over anti-money laundering deficiencies and sanctions violations.
According to the Financial Times investigation, internal systems at Binance continued to flag numerous accounts for potentially illicit activity, yet transactions worth hundreds of millions of dollars were processed regardless. This pattern suggests systemic compliance failures that persisted even after the exchange agreed to sweeping reforms and enhanced monitoring as part of its settlement terms.
The report arrives at a particularly sensitive time for the cryptocurrency industry, which has been working to rebuild trust with regulators and traditional financial institutions following a series of high-profile collapses and fraud cases. Binance, under the leadership of new CEO Richard Teng following founder Changpeng Zhao's guilty plea and resignation, had positioned itself as committed to a new era of transparency and regulatory adherence.
As part of the November 2023 settlement, Binance agreed to implement robust compliance programs, including enhanced due diligence procedures and transaction monitoring systems. The exchange also accepted a five-year monitorship to ensure adherence to these commitments. The latest revelations suggest these measures may not have been implemented as effectively as promised.
The implications extend beyond Binance itself. Regulatory authorities who negotiated the settlement may face questions about the adequacy of enforcement mechanisms and whether financial penalties alone can drive meaningful behavioral change at cryptocurrency exchanges. For the broader industry, the report underscores ongoing challenges in balancing rapid innovation with the compliance standards expected of major financial institutions.
Binance has not yet issued a detailed public response to the Financial Times report, though the exchange has previously stated its commitment to maintaining the highest compliance standards.