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Above and Beyond for Users: How Binance Helps Tackle Crime On - and Offline

2024-01-23

Main Takeaways

  • As an industry leader with a user-obsessed culture, we go above and beyond industry standards to protect our users and further the security of the global blockchain ecosystem. User security remains our highest priority.

  • Binance's security and investigations teams have successfully thwarted international criminal rings, acted against major hacking incidents, helped solve crimes against persons, and tackled online scams, leading to significant recoveries and arrests.

  • Binance invests significant resources and effort in these measures to take care of our community, as exemplified by several instances where Binance's efforts led to the recovery of stolen assets and justice for victims.

Over the last few years, Binance has built a comprehensive, industry-leading compliance program and made tremendous efforts to invest in security and compliance to further user protection. These include rigorous compliance and security measures and extensive cooperation with law enforcement to further the security of the broader blockchain ecosystem. However, one key question often gets overlooked: Why exactly do we invest so much resources and efforts in security and compliance and always go the extra mile in collaborating with authorities and law enforcement?

The answer lies in the core value that powers everything we do: taking care of our users. As an industry leader with a unique user-obsessed culture, we go above and beyond industry standards to protect our customers and further the security of the global blockchain ecosystem. This includes working closely with law enforcement and regulators around the world to detect and thwart bad actors, which helps safeguard the rapidly evolving cryptocurrency space and makes Binance a more secure platform for users and their assets.

We have always held Binance to the highest standards, even where we didn't have the obligation to do so, because it's the right thing to do and protects users' interests. 

Our compliance program enables numerous preventative measures for keeping bad actors at bay before they pose a threat to users and the ecosystem. And even if a crime does take place, the work of our compliance and investigations professionals increases the chances of victims’ funds being recovered and perpetrators being identified and prosecuted. In this blog, we detail some of the cases where Binance investigators and security experts helped protect our users, the wider crypto community, and even crime victims outside of the crypto space. 

Seeing the Victim

Although research shows that transactions linked to illicit actors make up a minuscule share of the overall crypto transaction flow, digital assets, like any other financial instruments, can be used to facilitate all kinds of criminal activity. This relates to both crypto-specific crimes like protocol exploits and rug pulls to more conventional scenarios like online romance scams or even real-world offenses where cryptocurrency is used to move ill-gotten gains.

Behind every criminal act, there is a victim – or many victims – who got abused or hurt, lost their money, and left with a permanent scar from the experience. An artist in Turkey who set out to explore the world of NFTs and got their crypto stolen. A caregiver in Belgium who got lured by a new online friend into a sham investment scheme. A 23-year-old who made it big in investing, only to see much of his funds lost to a wallet hack. A crypto company CEO who was abducted and forced to turn over a fortune in cryptocurrency to secure his release.

Crime victims come from all geographies and demographics, and it doesn’t matter who or where you are; if you, as a Binance user, were targeted by bad actors, we will use our expertise and investigation skills (and join forces with law enforcement and industry partners, whenever possible) to do our best to come to your aid.

Thwarting Criminal Groups

Some large-scale international criminal rings or even terrorist groups use digital assets to move funds across borders. However, by doing this, they expose themselves to the threat of being traced by blockchain investigators taking advantage of crypto’s transparent nature. Joining forces with national police investigators, Binance sleuths can and do contribute to efforts dealing serious blows to cybercriminals and terrorists.

In 2020, Binance collaborated with the Cyber Police of Ukraine on the Bulletproof Exchanger Project, which aimed to track down transactions between Binance and high-risk entities. This led to the identification and arrest of a cybercriminal organization responsible for a ransomware campaign and laundering more than $42 million in cryptocurrencies over the last two years.

The following year, Binance investigators took part in an international case alongside the Ukraine Cyber Police, Cyber Bureau of the Korean National Police Agency, US law enforcement, the Spanish Civil Guard, and the Swiss Federal Office of Police, among others, that led to the arrest of the members of FANCYCAT, a prolific cybercriminal ring responsible for over $500M worth of damages from running cyber attacks and laundering money from dark web operations and high-profile cyber attacks.

Binance’s AML analytics tool detected suspicious activity on the Binance platform and expanded the suspect cluster. Upon mapping out the complete suspect network, the team worked with private-sector blockchain analytics companies, TRM Labs and Crystal, to analyze on-chain activity, which ultimately led to the identification and eventual arrest of FANCYCAT members.

In a notable 2023 anti-terrorist case, Binance, in collaboration with the National Bank of Tajikistan and blockchain analytics firm TRM Labs, contributed to an effort that led to the arrest of several key members of the terrorist group Islamic State – Khorasan Province (ISKP). 

Standing up to Hackers

Hacks and exploits targeting both centralized crypto platforms and DeFi protocols are another significant threat to users’ digital assets. Binance’s security and investigations experts have a strong record of recovering funds lost in such attacks, thus helping the victims get back at least some of their money.

In 2022, Binance recovered stolen funds originating from the Axie Infinity exploit. When Lazarus, a North Korean hacking group, transferred the stolen assets to Binance from 86 different wallet addresses, we immediately held these transactions, eventually recovering $5.8 million worth of crypto.

In August 2022, Binance froze crypto assets that were stolen from Curve Finance users, worth about $450,000 and representing 83% of the hack. The Curve Finance hacker had sent the assets to Binance using a variety of techniques to bypass our security controls, but was eventually detected nonetheless. Binance worked closely with law enforcement to return the funds to the users.

In 2023, several Binance teams collaborated internally to identify two people involved in the exploit of the decentralized protocol Platypus Finance. They then referred the case to French law enforcement, who arrested the suspects.

Crimes Against Persons

Sometimes digital assets get involved in incidents that go beyond the virtual world and where people can get hurt physically. Fortunately, the digital traces that perpetrators of such crimes leave can help law enforcement track them down.

Two 2022 cases from São Paulo, Brazil, provide vivid illustrations. In one, the Binance Investigations team worked closely with the Prosecutor's Office of São Paulo to trace the proceeds of a kidnapping and extortion that resulted in the loss of approximately 2M BRL (over $400,000). The suspect tried to obfuscate their transactions using the premium privacy feature of a crypto wallet, but that proved not enough to prevent the investigators from identifying the suspect's deposit address. 

In another case, the Binance Investigations team worked closely with the Civil Police of São Paulo to trace and freeze the proceeds of another extortion. In both cases, collaboration between Binance and law enforcement officers, as well as the know-your-customer (KYC) procedures enforced on the Binance platform, played a critical role in the perpetrators’ subsequent arrests.

In October 2023, our Investigations team was contacted by the Royal Malaysia Police attaché unit regarding the kidnapping of a Malaysian citizen in Manila earlier that year. Tragically, the victim did not survive. However, Binance investigators were able to assist law enforcement in their investigation. Philippine law enforcement made arrests of the identified suspects, marking another win resulting from collaboration that began with Binance’s training outreach.

Tackling Scammers

The list would be incomplete without mentioning our efforts to protect our users from another common threat: online scams. One particular variety has been on the rise in recent years: the so-called pig butchering scams, a type of mixed investment-romance scam where criminals build relationships with their targets over time to then lure them into participating in fake investment schemes.

In 2023, Binance supported the United States’ Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) in a significant pig butchering case where over $112 million in funds were seized. Our Investigations team took swift action by identifying and restricting the flow of illicit funds through the platform. This directly helped support the recovery of funds lost by the victims. The team’s efforts complement the work accomplished by federal authorities. 

Another major case saw Binance team up with the Cyber Crime Investigation Bureau (CCIB) of the Royal Thai Police and the U.S. Homeland Security (HSI) for an investigation to take down a criminal group responsible for a major pig butchering scam that has affected thousands of victims in Thailand. Binance and HSI provided CCIB with intelligence that allowed them to apprehend five key members of the criminal group and seize around THB 10 billion ($277M) worth of assets, including luxury vehicles, houses, land titles, and other high-end goods. Since then, over 3,200 victims have filed for compensation.

In a separate case, Binance assisted the Central Investigation Bureau (CIB) of the Royal Thai Police in another crypto scam case that led to a vast network of transnational criminal organizations being dismantled. The arrest operation was conducted across 30 locations in the Bangkok, Samut Prakan, and Udon Thani provinces and deployed over 200 law enforcement officers.

Always There to Help

The Turkish artist who got his money stolen reached out to Binance customer support to report the incident. Our investigators identified the suspect and negotiated with them, eventually persuading them to return the assets to their rightful owner. The 23-year-old investor’s story followed a similar scenario, with the thief eventually returning the funds. The Belgian caregiver’s fake “friend” was identified and sentenced by a Nigerian court. With the help of Binance, the kidnapped crypto CEO managed to recover funds totaling some $2.6M previously paid as ransom. There are a variety of methods and tools to help crime victims, and we are ready to use them all to do right by our users, depending on the context of each case.

At Binance, we understand that our responsibility towards our users is to provide an environment that is safe and secure, as well as to be ready to stand up to any unlawful activity that could pose a risk to those who trust us with their assets. For practical assistance, head over to our Support Center to learn more about user protection on the Binance platform. From a robust compliance program to extensive collaboration with global authorities, we are here to ensure our users are protected at every step of their cryptocurrency journey.

Further Reading