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Is crypto the haven for illicit money laundering? Not on Binances’ watch

Crypto is an awful vehicle for laundering money for a few reasons.

Nigeria charged Binance and two of its executives with tax evasion.SOPA images

One, KYC is stringent in the industry and it’s simply much easier to open a bank account with fake identification documents at a small local or regional bank. Two, you simply cannot move large sums of money into crypto without people noticing, and three, it is trackable.

Even most so-called “privacy coins” are much more transparent and easier to trace than traditional cash.

Unlike cash, which is nearly impossible to track, Blockchain has proven to be one of the most powerful tools for law enforcement. The immutable, public nature of the blockchain makes crypto a poor choice for money laundering because it allows law enforcement to uncover and trace money laundering far easier than cash transactions.

That said, while the fact remains that the traditional financial system is far more susceptible to money laundering and sanctions-busting than crypto will ever be, Binance is at the forefront of tackling global money laundering.

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Binance has the world’s most sophisticated anti-money laundering systems and employs the most experienced anti-money laundering investigators; not only in crypto but in the world, and regularly provides law enforcement with leads and other information that helps them detect and deter crimes.

Binance remains focused on building user trust through regulatory compliance, security, and strategic partnerships, particularly in areas like anti-money laundering (AML), Combating Financing Terrorism (CFT), and building a robust Know Your Customer (KYC) process which is a built-in safeguard against fraud and identity theft.

Taiwan’s government has recognized Binance for its unique cooperation with domestic law enforcement in tackling virtual asset fraud cases. This collaboration marks Binance as the sole offshore exchange aiding the Taiwanese government by providing access to accounts implicated in fraud schemes and facilitating the recovery of assets derived from these illicit activities.

Strengthening Anti-Fraud Measures

In an effort to clamp down on virtual asset investment fraud, Taiwan has intensified the compliance requirements for cryptocurrency platforms. Nine cryptocurrency exchanges are currently collaborating with the Ministry of Interior to mitigate cryptocurrency asset fraud as part of the country’s investment control mechanism. Despite the presence of over a thousand virtual asset service providers (VASPs) operating from abroad, Binance stands out as the only exchange actively engaged with Taiwanese agencies.

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Regulatory Environment and Proactive Investigations

Taiwan’s Financial Supervisory Commission (FSC) oversees financial markets but does not proactively investigate VASPs and currency trade businesses under current sanctions. This lack of proactive investigation contributes to the prevalence of fraud. However, Binance’s partnership with the National Police Agency of Taiwan has bolstered its anti-fraud efforts, including account access and fund reallocation following legal directives.

Successes in Fraud Prevention

Taiwan’s engagement with crypto companies has previously led to significant outcomes. For instance, in November, authorities confiscated over $320 million worth of USDT from an investment fraud scheme, marking one of the largest seizures from an individual in Taiwan. With the cryptocurrency industry’s expansion in Taiwan and over 50 virtual operators expressing interest in entering the market as of September, the government may consider additional sanctions targeting virtual asset fraud through special legislation later this year.

Binance’s cooperative stance with Taiwanese authorities highlights the importance of collaboration between cryptocurrency exchanges and law enforcement to address and mitigate virtual asset fraud effectively. This partnership sets a precedent for other exchanges and underscores the role of regulatory compliance in fostering a safer cryptocurrency environment.

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