In response to a recent article from Reuters, Binance has issued a vigorous defense of its compliance policies for preventing and tackling cryptocurrency-based financing of terrorism. The report raised doubts about Binance’s practices in this area, but the company says that the reporter deliberately omitted critical facts to fit a preconceived narrative.
Binance Hits Back At Reuters With Strong Defense
The Reuters article was published on May 5, 2023, and raised questions about Binance’s compliance policies for preventing and tackling cryptocurrency-based financing of terrorism. The report suggested that Binance may need to do more to prevent bad actors from using its platform for illegal purposes.
Specifically, the article raised concerns about several law enforcement cases involving Binance, including the seizure of assets linked to terrorist organizations. The report suggested that these cases highlighted weaknesses in Binance’s compliance policies and raised questions about the company’s commitment to preventing illicit activities on its platform.
Per Binance’s response, the exchange takes the issue of preventing terrorism financing very seriously, and the company wants to set the record straight. In its statement, the company asserts that it is unaware of any exchange or financial institution that does more than Binance to keep bad actors off its platform.
Binance’s robust compliance program incorporates sophisticated anti-money laundering and global sanctions principles and tools to detect and address suspicious activity. Furthermore, the company’s policies and processes comply with AMLD5/6 anti-money laundering law and counter-terrorism financing requirements. Binance even has specialists on its team who have focused their entire careers on counter-terrorism.
In addition, In its response, Binance noted that one often overlooked fact in blockchain transactions is that it is impossible to block or reverse a digital asset deposit once a transaction has been verified on the blockchain.
Instead, according to the exchange, the proper compliance measures for a crypto exchange are the steps to identify and react to suspicious deposits. Binance is an industry leader in this area. When the exchange learns of bad behavior, it intervenes and takes appropriate action, including freezing funds and working with law enforcement to support investigations.
“No Exchange Does More” To Prevent Bad Actors
Binance also addressed the cases raised in the Reuters article and noted the importance of being careful about what information is shared during ongoing law enforcement investigations. However, the company has been working closely with international counter-terrorism authorities on these seizures.
Regarding the specific organizations mentioned in the article, Binance clarified that bad actors do not typically register accounts under the names of their criminal enterprises. The company’s team collaborates with law enforcement and leverages information only available to them to identify individuals operating accounts for criminal organizations.
Furthermore, per the company’s response, They currently have over 750 compliance-supporting employees, many with prior law enforcement and regulatory agency backgrounds. These employees are involved in various activities, including sanctions control work such as anti-money laundering, name screening, Know Your Customer (KYC) onboarding, and on-chain monitoring.
The exchange also noted that it has helped law enforcement freeze and seize more than $1 billion this year. The company highlighted the challenges of preventing illicit activities on its platform and noted that it had invested heavily in its team and systems to address these issues.
Featured image from Unsplash, chart from TradingView.com
