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Japanese Crypto Exchange Accuses Binance of Facilitating $9 Million Money Laundering

| Updated
by Tolu Ajiboye · 3 min read
Japanese Crypto Exchange Accuses Binance of Facilitating $9 Million Money Laundering
Photo: Depositphotos

After hackers stole $9.4 million from Zaif in 2018, its new owner Fisco has now sued Binance for facilitating money laundering.

Japanese cryptocurrency exchange Fisco has sued Binance for facilitating money laundering through the 2018 Zaif hack. At the time, the stolen Bitcoins were worth $9.4 million. Today, the Bitcoins are over $15 million. 

On the 20th of September 2018, Zaif revealed that the company had lost almost 6.7 billion Japanese yen to hackers. At the time of the press release, Zaif said the hackers stole MONA, Bitcoin Cash, and BTC.

Fisco Sues Binance for Money Laundering

The company also said that it had reached an agreement with Fisco to receive financial support of $445.5 million in exchange for a significant share of ownership. As a result of the deal, Fisco became the owner of Zaif.

Now, Fisco is suing Binance in a US court for allowing criminals to convert the stolen crypto from Zaif exchange. The complaint also added that Binance served as both a “receptacle and transmitter of criminal funds.” Fisco said the criminals converted the stolen crypto to other cryptos or cash, taking advantage of Binance’s weak know-your-customer (KYC) policies. 

Stating that the KYC and anti-money laundering protocols are “shockingly lax”, the lawsuit said:

“The thieves were able to launder the bitcoins stolen in the Zaif hack through Binance because Binance failed to implement security measures that were standard throughout the industry.”

According to the 33-page complaint, the “thieves” stole 1,451.7 Bitcoin from Zaif through Binance. Also, a significant portion was sent to an address that also belonged to Binance.

Furthermore, Fisco said that Zaif asked Binance to freeze all transactions and accounts involved in the theft. Despite the alert, Binance failed to take any action to stop the criminal act. Fisco also said Binance failed “either intentionally or negligently.”

As a result of Binance’s involvement in money laundering as alleged by Fisco, the Japanese company now seeks repayment:

“After a Japanese exchange was hacked in 2018, the thieves laundered more than $9 million of the stolen cryptocurrency through Binance. Plaintiff Fisco Cryptocurrency Exchange, Inc. now seeks payment from Binance for those losses

Another Binance Lawsuit

Earlier this year, Binance was also one of the targets in a lawsuit that alleges the firm has sold unlicensed securities. Also, Binance had somem involvement in broker-dealer transactions without registering with the US Securities and Exchange Commission.

The suit was filed on behalf of different individuals, including Eric Lee, Chase Williams, William Zhang, and Alexander Clifford.

Cointelegraph reported on the 10th of April that the lawsuit could cost Binance billions of dollars. Apart from Binance, other crypto platforms with involvement in the case include KuCoin, BitMEX, HDR Global Trading Limited, and BiBox.

The Roche Freedman lawsuit also mentioned some of company’s executives. The executives include Changpeng Zhao also known as CZ, Dan Larimer, Vinny Lingham, and Brendan Blumer. 

Ranked 7th, BNB boasts of a market cap of $4,136,655,997. Currently, Binance Coin is trading at $28.65, at a loss of 11.35% over its previous close of $31.18.

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