- Global drug cartels allegedly used Binance to launder tens of millions of people, according to an ongoing DEA investigation.
- About $15 million to $40 million in illicit profits may have leaked through Binance, according to Forbes, which obtained a search warrant.
- Here is how the world’s largest crypto exchange is reportedly working with investigators.
Global drug cartels have used Binance to funnel millions of illegal profits from gangs, an ongoing U.S. Drug Enforcement Administration investigation claims.
According to Forbes, citing search warrants obtained, between $15 million and $40 million was laundered through the world’s largest cryptocurrency exchange.
Binance, which announced plans to buy a minority stake in Forbes earlier this year, is working with investigators to track down suspects.
An investigation into the cartel’s use of Binance began in 2020, when a DEA informant on another cryptocurrency trading platform found users offering cryptocurrency in exchange for fiat, Forbes reports.
The DEA found one culprit, Carlos Fong Echavarria. He later pleaded guilty to charges including money laundering and drug dealing. Binance helped the agency by tracking his Echavarria trading activity on the blockchain totaling $4.7 million. By tracking on-chain activity, we were able to identify additional accounts funded by Echavarria as per the warrant.
Another account holder, who has not been formally charged, is alleged to have purchased $42 million worth of cryptocurrency, at least $16 million of which came from drug money.
Matthew Price, senior director of research at Binance, told Forbes, “This is really an example of how transparency in blockchain transactions works against criminals. We have a record.”
Earlier this year, Binance assisted the DEA in its efforts to seize over 100 accounts linked to laundering in Mexico.
Meanwhile, Binance is reportedly facing an investigation from the U.S. Department of Justice, according to Reuters, citing four sources familiar with the matter. The report says the company’s books resemble a “black box,” and even Binance’s former chief financial officer never had full access to his accounts during his nearly three-year tenure.
In a statement to Reuters, Binance’s chief strategy officer said the report’s analysis and portrayal of its business units were “completely false.”
