Binance among crypto exchange Bitzlato's top three receiving, sending counterparties

Khanchit Khirisutchalual

Cryptocurrency exchange Binance on Thursday was listed as one of the top three receiving and sending counterparties in an order against Bitzlato, the little-known crypto exchange that was accused earlier this week of processing over $700M of illicit funds.

"Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or scams," the order, issued by the Treasury's Financial Crimes Enforcement Network (FinCEN).

"Bitzlato’s top three receiving counterparties, by total amount of BTC (BTC-USD) received between May 2018 and September 2022 were: (1) Binance, a VASP; (2) the Russia-connected darknet market Hydra; and (3) the alleged Russia-based Ponzi scheme 'TheFiniko.'"

During the same period, the top three sending counterparties were Hydra, Local Bitcoins and TheFinko, the order, effective Feb. 1, noted. The action itself "is the only means of adequately addressing the threat Bitzlato poses."

Binance did not immediately respond to Seeking Alpha's request for comment.

Earlier this month, (Jan. 9) U.S. prosecutors reportedly subpoenaed hedge funds with ties to Binance amid a long-standing probe against the trading platform in connection with its compliance with U.S. anti-money laundering laws and sanctions.