Class Action Alleges Binance Has ‘Turned A Blind Eye’ to Cryptocurrency Laundering

New to ClassAction.org? Read our Newswire Disclaimer

A New York consumer has filed a proposed class action in which he alleges Binance has knowingly aided and abetted the theft and subsequent laundering of Bitcoin, Ether and other assets from his and other consumers’ cryptocurrency wallets. 

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here. 

The plaintiff alleges in the 32-page lawsuit that Binance has illegally allowed stolen crypto assets, including Bitcoin, Ether, Litecoin and others, to be deposited into other accounts without applying Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to detect the lawful ownership of the cryptocurrency. 

The plaintiff says he had at least 7.2 Bitcoin and 449 Ether, equivalent to roughly $1,007,261 at the time of the lawsuit’s filing, stolen from his Coinbase account and deposited into Binance accounts in transactions for which Binance earned significant fees without applying KYC and AML protocols. 

“Binance has turned a blind eye to the wide variety of money and cryptocurrency laundering from around the globe it knowingly facilitates through its platform,” the complaint alleges, charging that Binance has “a strong monetary incentive to encourage, facilitate, and allow as many transactions on its exchange as possible,” even those involving stolen assets. 

Despite being one of the world’s largest crypto exchanges, Binance’s KYC and AML protocols during the time period at issue “were shockingly nonexistent or inadequate and did not measure up to industry standards,” the case alleges. The suit claims thieves have taken to laundering stolen crypto through Binance because the exchange has failed to implement security measures that would assure accountholders lawfully possess the assets deposited into their wallets. 

According to the case, Binance has allowed deposits and withdrawals of up to two Bitcoin per day without any form of identification verification. As a result, accounts can easily be opened anonymously, the suit relays. 

“To trade or withdraw up to 2 bitcoin per day, the accountholder need not provide even the most basic identifying information, such as name, date of birth, address, or other personal identifiers, or an attestation that the cryptocurrency initially or subsequently deposited is lawfully possessed. All Binance requires is a password and an email address.” 

Binance has been well aware that its KYC and AML policies were toothless yet “knowingly kept them in place to drive revenue and profit,” the lawsuit alleges, adding that the platform had the ability to freeze accounts suspected of dealing in stolen crypto assets yet has failed to do so. 

The lawsuit looks to cover all persons or entities in the United States who, within the applicable statute of limitations period through the date a class is certified, had their stolen cryptocurrency deposited into a Binance account. 

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.