Fisco Files Complaint Against Binance for Facilitating Money Laundering

The world’s largest cryptocurrency exchanges "Binance"
The world’s largest cryptocurrency exchanges "Binance"

Japanese cryptocurrency exchange Fisco has filed a complaint against Binance in the Northern California District Court on 14 September for facilitating the laundering of stolen funds.

What is the case file?

According to the complaint, thieves hacked Fisco and then sent 1,451 bitcoins to an address belonging to Binance.

Fisco filed this case after it lost nearly 6,000 bitcoins in the 2018 hack. The stolen amount was worth $9.4 million at the time.

Fisco added that Binance’s lax know-your-customer (KYC) and anti-money laundering (AML) protocols “do not measure up to industry standards.”

Aiding and abetting

According to Coindesk, the thieves are claimed to have taken advantage of Binance’s loose policies. Binance allows users to transact on the platform in amounts of less than 2 bitcoins without providing any identifying information.

 “The thieves broke the stolen bitcoin into seven thousands of separate transactions and accounts, all valued below the 2-bitcoin threshold. In this way, the thieves converted the stolen bitcoin into other cryptocurrencies and transmitted the value from the Binance platform,” Fisco said in the complaint.

Actual knowledge

Meanwhile, the US court alleged that Binance received notification and had “actual knowledge” of the funds laundered through its platform.

The Malta-headquartered exchange could have frozen the accounts and stopped the transactions involving the stolen funds, according to Finance Magnates.

“Binance could have done so before some or all of the stolen cryptocurrency left the Binance exchange, but it did not do so. Binance either intentionally or negligently failed to interrupt the money laundering process when it could have done so,” Fisco said in its complaint.

Therefore, Fisco is demanding Binance to pay for its loss of the laundered funds in addition to other punitive damages.

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Sally ElShorbagy 21 Articles
Sally ElShorbagy is a freelance journalist and translator who currently covers the future of the cryptocurrencies and the digital economy revolution.