At CoinGeek, we’ve repeatedly covered how ransomware is a growing problem, costing innocent victims hundreds of millions of dollars annually.
From the Wannacry attack to the infamous NetWalker ransomware that has wreaked havoc on hospitals, schools, government departments, and countless small businesses, ransomware isn’t going away anytime soon.
Now, a special agent for the Federal Bureau of Investigation (FBI), Daniel M. Sirmons, has said under sworn deposition that according to his knowledge, training, and experience, ransomware attackers frequently use digital currency exchanges like Binance to launder or obfuscate their ill-gotten gains.
It’s not the first time Changpeng Zhao’s Binance has been linked to criminal activity using so-called “cryptocurrencies.”
Stolen funds allegedly deposited directly into Binance accounts
In the deposition, Special Agent Sirmons outlined several instances in which U.S.-based companies were targeted by NetWalker ransomware and extorted for sums totaling hundreds of thousands of dollars each (paid in BTC).
According to his testimony, after merging the funds and mixing them in various wallets, the attackers sent multiple deposits directly into target Binance accounts. Binance records show that the account in which the funds ended up is owned by a 20-year-old Ukrainian national named Tetiana Lukianiuk. This individual then exchanged the BTC for Tether, holding both currencies worth approximately $433,271.39.
Sirmons stated that there is probable cause to believe these funds are those gained via the ransomware attacks and that these funds constitute property involved in money laundering and are, therefore, subject to civil forfeiture.
However, he also highlighted Binances’ claim that it is a non-US company and is not subject to U.S. jurisdiction. Therefore, it cannot be compelled by the U.S. process. However, according to Sirmons, it has said that it will put a temporary hold on the account but will not do so for an indefinite time, which could compromise the ongoing criminal investigation.
Binance and Tether always seem to be linked to dirty dealings
Ever since we began reporting on the Crypto Crime Cartel and its misdeeds, two names have repeatedly crept up: Binance and Tether. Here they are again in the context of theft and money laundering; quelle surprise!
As it’s based in the Cayman Islands and its CEO jurisdiction hops constantly, it’s difficult to get Binance to comply with the legal processes of major governments such as the United States. Dr. Craig Wright said long ago that it was nothing more than a bucket shop used for money laundering, and it looks as if he’s once again being proven correct by the evidence.
No matter what actions Zhao takes to paint his firm as legitimate, such as taking a stake in Forbes (likely to influence its reporting), cases like these will always taint his image and that of Binance. There’s no whitewashing of the crime spree that has taken place over the past decade or Binance’s involvement in it since its launch in 2017.
Binance and centralized exchanges are the antitheses of Bitcoin
In a sad irony, most of the industry’s biggest players, who are Bitcoin’s biggest public cheerleaders, have become the antithesis of the peer-to-peer electronic cash system it was supposed to be.
Far from being a shadowy digital currency tailor-made for crime, Bitcoin was launched as a fully traceable cash system. Dr. Wright, the man behind the moniker Satoshi Nakamoto, has explained many times how Bitcoin is the opposite of what many people think. All transactions take place on a public ledger and are presented in clear text, making it easy to pin down and prosecute illegal activity such as theft and money laundering.
Contrary to what BTC advocates claim, Bitcoin nodes can be legally compelled to freeze funds and wallets pending criminal investigation. Should it turn out that a crime has occurred, they can also be compelled to seize ill-gotten gains. This will be demonstrated in court soon.
Imagine if gold turned to lead when stolen. If the thief gives it back, it turns to gold again… – Satoshi Nakamoto
Sadly, the world created by Zhao, the executives at Tether, and many other advocates of ‘crypto’ is the opposite of the honest, transparent world envisaged by Satoshi Nakamoto. Nonetheless, his original dream and vision are alive and well as Bitcoin SV.
Exchanges like Binance and dodgy stablecoin issuers like Tether can continue to allow their products and platforms to be used for crimes for as long as they wish, but it won’t change the fact that Bitcoin leaves a perfect evidence trail leading directly to them, and in time, the hammer will come down on them for exactly this reason.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.