The US DEA Accuses Binance Of Fostering Money Laundering For A Drug Cartel

An investigation by the US DEA (Drug Enforcement Action) has accused Binance of helping a drug cartel to transfer illegal funds. A Forbes report quoted the DEA saying the gang transferred over $40 million through Binance.

This news put the crypto exchange in a tight corner after a previous report alleged it broke US sanctions.

Drug Cartel Reportedly Laundered $15M-$40M Through Binance 

Meanwhile, Forbes added that Binance works with the agency to unravel the situation and trace the crime. The DEA’s search warrant revealed that the probe began in 2020.

Inside sources close to the DEA uncovered claims in the case that a user conducted a cash-for-crypto exchange. As per the probe, the suspect disguised the origin of the assets. Hence, it appeared as though they were payments from cattle farms and family eateries.

According to reports, law enforcement agencies arrested the suspect in 2021.

After further investigation, the agency followed the transaction trail and uncovered the account used to launder the funds. The account made over 146 crypto purchases worth over $42 million last year.

Furthermore, the account sold crypto worth over $38 million using 117 sell orders. According to the DEA, the drug gang made over $16 million in profit from the sales. DEA informants reportedly tracked the transactions online on different trading sites.

According to Forbes, the Mexico gang operates in Australia, Europe, and the United States, dealing in cocaine and meth. Changpeng Zhao, the CEO of Binance, recently tweeted that blockchain is transparent. Hence, it is easier to track criminal activities.

Binance At The Center Of Accusations

Earlier in May, Binance revealed in a blog post that it partnered with the DEA to nab over 100 user accounts. Drug dealers reportedly owned the accounts.

Unfortunately, Binance has been in the news recently for going against regulatory authorities. A recent post by Reuters accused Binance of hiding its trading activities from the masses.

According to Reuters, Binance’s “black box” contains over $22 trillion in transactions in 2022. In past news, Reuters accused Binance of engaging in illegal activities, such as offering crypto services to sanctioned countries.

Earlier in the week, Binance announced its partnership with the Chamber of Digital Commerce. According to the exchange, the partnership will allow it to lobby support for crypto entities.

Meanwhile, regulators have tightened AML laws guiding crypto operations. The aim is to ensure that criminals do not use crypto to finance terrorist operations.

On-chain data by Chainalysis in 2022 noted that crypto-related criminal activities hit a record high in 2021. According to the data, criminal-linked wallet addresses collected over $14 billion.

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