Global Drug Conspiracy Used Binance To Launder Millions In Crypto

[PawGo]

News like that does not help crypto-world to gain trust... And unfortunately helps a lot people who say crypto is for criminals and weapon/drug dealers.
And unfortunately the name of exchange sounds very familiar.

A methamphetamine and cocaine gang operating across the U.S., Mexico, Europe and Australia used the world’s biggest cryptocurrency exchange Binance to launder tens of millions in drug proceeds, according to an ongoing investigation by the US Drug Enforcement Administration. Between $15 and $40 million in illicit proceeds may have been funneled through Binance, the DEA alleged.

More details:
https://www.forbes.com/sites/thomasbrewster/2022/12/19/mexican-drug-gang-money-laundering-over-binance-crypto-exchange/?sh=2c9869754a59

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[bitmover]

A methamphetamine and cocaine gang operating across the U.S., Mexico, Europe and Australia used the world’s biggest cryptocurrency exchange Binance to launder tens of millions in drug proceeds, according to an ongoing investigation by the US Drug Enforcement Administration. Between $15 and $40 million in illicit proceeds may have been funneled through Binance, the DEA alleged.

More details:
https://www.forbes.com/sites/thomasbrewster/2022/12/19/mexican-drug-gang-money-laundering-over-binance-crypto-exchange/?sh=2c9869754a59

Isn't this a very small value compared to total volume those drug dealers deal with.?

According to worldmeters, the total volume is about 400 billions usd per year.

This is not too much money when in the right context.

"With estimates of $100 billion to $110 billion for heroin, $110 billion to $130 billion for cocaine, $75 billion for cannabis and $60 billion for synthetic drugs, the probable global figure for the total illicit drug industry would be approximately $360 billion. Given the conservative bias in some of the estimates for individual substances, a turnover of around $400 billion per annum is considered realistic."

https://www.worldometers.info/drugs/

[avikz]

That's quite unfortunate! I am concerned about what the future holds for Binance! They are already facing a federal investigation regarding money laundering, and this incident will allow the regulatory bodies and enforcement agencies to launch a full-scale investigation on Binance and eventually try to close their operations from US soil. Even though they are not directly involved in the drug trade, they will still face the heat. My concern is, that the ordinary public like us may see delayed withdrawals and suspensions due to all these nonsense matters. The cascading effect will be seen on the market which is already struggling with the falling price! Not ideal at all!

[bittraffic]

This seems to be good news for the DEA since Binance worked with them to uncover and trace transactions. It would appear DEA would need binance more if they wanna solve cases like laundering after all they are the largest crypto that operates as of now.

It's not BTC's fault not Binance, the launderers are just a bit getting techy and DEA needs to upgrade its knowledge about crypto.

[PawGo]

I am afraid that in the post-LUNA, post-FTX days, every news like that confirms crypto is 'dirty' and people will stay away from that. Of course this is only one side, on the other side we have tons of youtubers who were convincing people to invest in some sh*tcoins which would bring 'enormous profits'.
All that now collapsed and we look at ruins and smoke. I hope soon sun shine again, but today everything confirms coming into crypto world is too dangerous for a typical John Smith.

[DaveF]

Shocking....wait no it's not.

I wonder how many of the exchanges that don't ask for any sort of info other then an email address have tons of money flowing through them that came from questionable sources.

bitmover is correct in the fact that these numbers are a fraction of the total world drug trade.
BUT, these cartels are not nice people. They kill and hurt a lot of people. Not fighting them is not an option. Not sure if there is a good answer to dealing with the, just a bunch of less bad options.

-Dave

[bitmover]

bitmover is correct in the fact that these numbers are a fraction of the total world drug trade.
BUT, these cartels are not nice people. They kill and hurt a lot of people. Not fighting them is not an option. Bot sure if there is a good answer to dealing with the, just a bunch of less bad options.

-Dave

I agree. Fighting them is the only option. The point is that they wash way more money in other more traditional methods (such as fake companies, fake modern art, etc)
This Forbes article make it looks like binance is just a money laundry for drug dealers, but it is certainly not.

Binance/cryptocurrencies are now in the spotlight after FTX collapse (and SBF is a criminal, he hurted a lot of people as well).

[KennyR]

Technology is being used at its best to keep things to be used for the good. When the same doesn't happen and we see people using it for bad, it isn't the fault of bitcoin or Binance. I find this a way drug mafia have found for the ease of transactions and trade. Amidst all sort of measures taken from Exchanges and regulatory bodies, the illicit usage through exchanges continues. This shouldn't happen, because the same will create negative opinion among the cryptocurrency users.

[BitcoinPanther]

I do not think this news caters negative thought about crypto.  In fact I think this is a positive publicity because Binance having suspcious of the transaction cooperated with the authority in tracing illegal activities and catching the perpetrator.

This is the beauty of blockchain, record is permanent and transparent.  As Mathew Price stated:

“This is actually an example of where the transparency of blockchain transactions works against criminal actors,” Price told Forbes. “The bad guys are leaving a permanent record of what they're doing.

This showcase that illegal activity done in a decentralized blockchain will serve as proof and can trace criminals.

[hitsnorth]

Well, that's almost not surprising. The only thing I don't really understand is why did they use Binance? I thought they should avoid exchanges.

[348Judah]

A methamphetamine and cocaine gang operating across the U.S., Mexico, Europe and Australia used the world’s biggest cryptocurrency exchange Binance to launder tens of millions in drug proceeds, according to an ongoing investigation by the US Drug Enforcement Administration. Between $15 and $40 million in illicit proceeds may have been funneled through Binance, the DEA alleged.

More details:
https://www.forbes.com/sites/thomasbrewster/2022/12/19/mexican-drug-gang-money-laundering-over-binance-crypto-exchange/?sh=2c9869754a59

Only those that leave by centralized exchanges can have the consequences frombthe heat thereof, but not until then every user remain safe thinking bitcoin can only be secured with exchanges under a central authority like Binance, but even so, i still think about the amount of asset worth of millions involved and i think should centralized exchange be their best choice and alternative to use or even a more easy means to get them apprehended.

[jackg]

I don't know if this is negative news because someone got caught trying to launder $15-$40Mln or if it's bad news because it shows how easy some transactions can be to spot (especially for exchanges). Or perhaps it's not bad news because of the uncertainty stated that they can't get an accurate figure for how much actually came from them.

For global drug ratios, this does seem small and for a gang that large too. I'd be more interested at seeing what other accounts the investigation finds that might've moved more money (perhaps banks or payment processors would turn a blind eye or hide information for an appropriate fee in a way bitcoin can't)...

[NotATether]

Just ask Chainalysis to track them. They'll do a damn good job at that, because these blokes did not bother to mix their funds with a mixer or Coinjoin. Exchange hopping alone is not enough to obfuscate your source of funds.

[Accardo]

Such practices always have been the FBI's concern, bitcoin being used for illicit transactions; drug cartels used gold in the past to launder money now it's bitcoin. And the medium used for the transaction is always in trouble when discovered. Binance CZ may have lots of questions to answer and tracing to do regarding this operation. KYC is quite useless in tracing people, it'll always lead to the wrong person. I don't understand why it's needed if it can be manipulated. Though the FBI has enough tools to track the people involved, these drug cartels are not dumb people. The blame will be on Binance and cryptocurrency, which drain the reputation of crypto on daily basis.

[noorman0]

This is a negative side that must be accepted in this industry. I think this is no longer just a conspiracy when viewed more logically. Both binance and other centralized exchanges are vehicles that provide abundant reserves that are liquid enough for multi-million dollar businesses. Then, wouldn't it be a shame to ignore this object for dirty practicers or they have actually taken advantage of it since the beginning of the industry?
It's not just speculation, regulatory involvement is indeed mainly to catch crimes like this which are certain to happen one day, so investigations are the thing that should be done and exchanges are required to always cooperate in order to gain public trust.

[The Sceptical Chymist]

Isn't this a very small value compared to total volume those drug dealers deal with.?

Uh, yeah.  The state I live in is small, and I could almost guarantee you there's more than $40 million in cash drug deals going down every year.  Cash, not crypto.

But we all know headlines like this are complete propaganda aimed against crypto at a time when lawmakers are slobbering all over themselves, thinking of awesome new regulations and hoping the public doesn't push back against any of them.  And by "we" I mean those of us on the forum.  The bad news is that most of the general public does equate "crypto drug deals/Binance involvement" with "crypto is bad".

Not enough people think for themselves and come to their own conclusions about things, but rather rely on what the media tells them to think and believe.  Even less try to do something about shit like this.  I've written letters to my congressmen before, so while I don't exactly stand on a street corner wearing a pro-crypto sandwich board, I haven't done nothing.  Anyone got a sandwich board I could wear?

[dkbit98]

A methamphetamine and cocaine gang operating across the U.S., Mexico, Europe and Australia used the world’s biggest cryptocurrency exchange Binance to launder tens of millions in drug proceeds, according to an ongoing investigation by the US Drug Enforcement Administration. Between $15 and $40 million in illicit proceeds may have been funneled through Binance, the DEA alleged.

This Forbes article is just a part of big propaganda machinery and it looks like they are coming hard for Binance exchange and CZ, but in reality they are coming from all of us regular Bitcoin users.
Only way they can control Bitcoin is with stuff like this related with price, shutting down of exchanges, creating panic and decreasing value of Bitcoin, and meanwhile increasing regulations and restrictions.
I recently watched a good new series with Sylvester Stallone called Tulsa King and they just mentioned Bitcoin being used by criminals and hackers, story about that is just getting started.
Bad propaganda is spreading everywhere, and that doesn't mean that criminals don't use Bitcoin, but they certainly use fiat currencies in 99% of time.

[bbc.reporter]

That's quite unfortunate! I am concerned about what the future holds for Binance! They are already facing a federal investigation regarding money laundering, and this incident will allow the regulatory bodies and enforcement agencies to launch a full-scale investigation on Binance and eventually try to close their operations from US soil. Even though they are not directly involved in the drug trade, they will still face the heat. My concern is, that the ordinary public like us may see delayed withdrawals and suspensions due to all these nonsense matters. The cascading effect will be seen on the market which is already struggling with the falling price! Not ideal at all!

What is your favorite exchange? I would argue that all of our favorite exchanges are being used together with Defi to become one big, global moneylaundering ring for drug cartels and other criminal organizations. I would agree that it is unfortunate, however, it also shows everyone of one of the powerful use cases of the cryptospace.

This is only similar to much of the world's greatest inventions. Cell phones can be used to detonate bombs, cars are used by criminals to escape, airplanes are used to carry bombs to drop on populated areas and many other use cases.

[Darker45]

I've already read this news more than a week ago. But what made me curious beyond anything else was that Forbes is publishing an article which is detrimental to Binance despite the fact that Binance partly owns it.

If plans actually pushed through early this year, Binance acquired $200 million stake in Forbes. At that time, I assumed it was CZ's strategy not only to diversify his empire but also so that this influential media company would be shutting up its mouth regarding Binance or CZ or crypto in general.

But now, this. This paints Binance not only as a platform for criminals but also as a platform that works directly and actively with the DEA and other government agencies, sharing users' private information to track them down.

Although the article also somehow put Binance in a good light, albeit mostly to authorities, by making it appear as if the platform can't be used for illegal activities, I think it is done at the expense of its users and its image. But it seems Binance's priority right now is to appear clean in front of regulators. If this is a deodorizing effort, it's probably an urgent one considering that it might actually be facing criminal charges over violations on money laundering.

[bbc.reporter]

I've already read this news more than a week ago. But what made me curious beyond anything else was that Forbes is publishing an article which is detrimental to Binance despite the fact that Binance partly owns it.

If plans actually pushed through early this year, Binance acquired $200 million stake in Forbes. At that time, I assumed it was CZ's strategy not only to diversify his empire but also so that this influential media company would be shutting up its mouth regarding Binance or CZ or crypto in general.

But now, this. This paints Binance not only as a platform for criminals but also as a platform that works directly and actively with the DEA and other government agencies, sharing users' private information to track them down.

Although the article also somehow put Binance in a good light, albeit mostly to authorities, by making it appear as if the platform can't be used for illegal activities, I think it is done at the expense of its users and its image. But it seems Binance's priority right now is to appear clean in front of regulators. If this is a deodorizing effort, it's probably an urgent one considering that it might actually be facing criminal charges over violations on money laundering.

If CZ is sentenced with criminal charges, who will be the next biggest warlord in the cryptospace? There is no other person that can be speculated except Justin Sun, I reckon hehehe. It is also rumored that he has exchanged $2 billion of USDC to USD through Circle and has withdrawn this in his own bank accounts. This is only the declared part of his wealth. I am quite certain the larger part of these cryptowhales' wealth are undeclared and siphoned off the cryptospace and sent to their anonymous selves in Swiss bank accounts.