Topic: Binance sued for money laundering over stolen bitcoin. - page 2. (Read 815 times)

Yeah, agree with. Everytime I read news about a person/group suing an exchange as the destination of the hacker, it looks like they want to split the bill. 
Nowadays, you can buy fake accounts with KYC. I saw it on a facebook crypto group.

I guess and I have doubt that will be the reason behind the scene. They know that Binance is a large exchange and most of traders use this Binance for years. The point is, why they don't report and until bitcoin was successfully withdrawn. It's obviously they want to ruin the repuation of Binance which is possible to happen because they are also against from fraudulent activity.

You guys think that if they were successfully ruin the reputation of Binance there is a chance to increase traders. It sound s like a trap.

Seriously speaking, what would Binance do when the thieves weren't so scared of going for a KYC when it's about millions of dollars and what will the victim exchange gain by trying to defame Binance over this saying that they don't meet the industry standards when it comes to KYC?

If the thieves would have already had done fake KYC over Binance and redeemed the coins into another exchange or simply went for an OTC deal? Even if they sold their coins, don't you think it's be easier for them to just get a fake bank account which is not theirs but on someone else's name? And at some places, even the bank guys are guilty because too much money is involved here, so their integrity can easily be bought.

I don't understand how a 2 BTC limit could be used for almost 1.5k BTC... It's, like, at least over 700 accounts to pull this off. And if the KYC really the issue here? Maybe some other rules could be enforced instead. Such as a VPN ban and obligation to share real geolocation. Making 700 accounts would be way more difficult in that case. I understand that 700 KYCs is even better for this case, but simply because some manage to abuse the system, I don't think it's fair to impose KYC on everyone. Not to mention what's been pointed out about identity theft. Lowering the limit to 1 BTC or even 0.5 BTC would make sense, but also some additional measures like geolocation or the MAC address, idk. There must be something apart from KYC that could be enforced, right?

So who is having fault now? Binance or the bitcoin system itself. I know that bitcoin was built for a digital or cashless transaction making it anonymously as an option for this feature but still one can find ways to get identity verified if it is needed for both parties before proceeding into the transaction. However, this issue is clearly the for binance mismanage loopholes in their system and making it clear that there is a violation in their system not getting detected or just leave that way without them apprehending the users behind this activity. Pretty that they got profit from the transaction and probably does not think no one will going after them.

Good point! May they had sued Binance knowing its a losing case but hoping they will come to a settlement and ultimately recover their lost funds - assuming Binance would submit to their demand and  that is only possible if Binance will opt for a compromise but I doubt they would not do it since the case lacks merit and it could damage their reputation within the crypto-community. Imho.

If I wanted to make money from arbitrage trading bitcoin, I would be signing up with an FCA-regulated CFD broker and hedging on BTCUSD prices, not with a crypto exchange with little oversight and a history of security breaches while trading the same cryptocurrency you're holding your capital in, it prevents you from profiting on shorts without complex BTC <--> Tether swaps.

Basically if they confirmed that their exchange was hacked, they will be cautious already and the very first thing that a person will do for this kind of fraud is to investigate the wallet address of the recipient. I wonder why it took a long time for them to see receiving address as Binance account or report it to Binance too late. Knowing that Binance could freeze the account and investigate too to avoid the funds being withdrawn. They literally waited for the funds to be completely stolen then sued Binance for it. Is it just a possible attack to Binance?

Withdrawing 2BTC / day can be risky, any custodian wallet, including Binance can easily seize the funds if they get the chance.
Binance has also some bad guys caught in their history (see here or recently here). Of course, catching a few rotting fish when half of the pond stinks, is not enough.

However, what Zaif exchange does is not so much related to Binance doing anything wrong. They try to deflect public eyes from them to somebody bigger. They want to hide their incompetence, which is .. childish.

Why have to worry for lost your identity with rusted exchange like Binance, maybe for withdrawing under 2 btc every day is not have to kyc and bigger investor will submit KYC for allowing withdraw more than 100 btc every day, right now many people always try to KYC because some time have good chance to get profit when arbitrage.

Even Bisq has a 0.01BTC trading limit for unverified accounts, and Binance has withdrawal limits as high as 2BTC?? What's the point of blocking access to whole countries if they can just transfer it to someone abroad who can withdraw it to a bank account they control?
If you're going to implement AMLs then at least do it properly, false impressions of compliance are worse than no compliance at all.


Legally they can't file a lawsuit against a collection of open-source developers if they have a legal complaint with the software they're developing, because an open-source project is not a legal entity. Instead they usually go after major corporate users of said software, like how SCO sued IBM (or was it Novell?) to claim Linux kernel source code as their intellectual property. In this case if they were to initiate such a hare-brained case they'd be going after Blockstream, who sponsored some of the bitcoin devs at the time Coinjoin was made.


Agreed, KYC is fundamentally broken. If you complete KYC for your bitcoin services you are effectively using a less useful form of payment than credit cards, since those are accepted practically anywhere, whereas Bitcoin isn't. You need to give your documents to every single vendor you want to buy from, versus a centralized bank or payment processor.

AML regulations seem to have been hastily written as soon as regulators noticed that bitcoin was being used for illegal things like Silk Road. They are playing a game of whack-a-mole if they put KYC requirements on the top 50 exchanges but you can just withdraw your BTC to a credit card on Yobit or .

I've never completed KYC before, and probably never will, because I can't afford to lose my identity. But, I also feel bad for bank account commoners whose bank documents are stolen and used for identity theft but they are not even aware that their identity has been stolen.

They did, but can they sue Binance for that.

Binance has been operating with a license and if they have an anti money laundering policy, that should be based on what the regulators are directing them to follow and implement, so I don't think that Binance is guilty for this case since they have their policy and it was not  penalize by the regulators.

If they will do that to Binance, then the rest of the exchanges are also not implementing their anti money laundering policy based on standards.

I wonder what this exchange would have done if the criminals had sent all the coins directly to a mixer or via coinjoin. Would they be trying to sue wallet developers? Or perhaps the bitcoin developers themselves for coming up with coinjoin?

Read the article I shared above. They did not move all the coins through a single account over several months. Rather, they created multiple accounts and used them all simultaneously.

If you have your identity stolen and used in a money laundering or similar scam, you can end up with a criminal record and serving a punishment for a crime you did not commit. It can take years and tens of thousands of dollars of your own money to get your name cleared, all the time leaving you with a criminal record, unable to get a job, get insurance, and so on. It's difficult enough when the crime is in fiat and you can show account statements and similar which prove you had nothing to do with it. How much harder do you think it will be for bitcoin? How do you prove you do not own a bitcoin address?

Every time you complete KYC anywhere you are taking a risk.

I think Binance's alibi would be that they had acted in good faith, hence the 2 BTC daily withdrawal for unverified accounts. Morever, Binance is not the only exchange imposing more or less on such withdrawal limit for unverified accounts.

In this regard,  Binance would only be accountable and liable if the aggrieved party could prove that they have previously informed them of such illegal activity and Binance didn't do any action such as freezing those accounts involved to mitigate the situation.

It truly is scary and really really dangerous. This is one of the reasons why privacy and security advocates frequently tell people to take their internet security and privacy seriously. Because once your personal information and documents gets leaked to the internet? There's a decent chance that you're gonna get screwed.

That would be a worst nightmare to a certain identity being use if will get trace and lead to a certain user who had no information on the current event that was happening. Actually 1400 + bitcoins to launder would be needing KYC and the user has the guts to do it. So hard to believe news these days. This year really a worst year for us having the pandemic plus people around doing dirty activities. This will not definitely will not going to put a stop and will probably going to continue and will gets worse as time pass by.

I talked about crystal ball because I doubt anyone would transfer so much stolen money to an exchange where he could only withdraw 2 bitcoins a day, while that person could simply use many mixers that all his work would be much easier. I will wait to see what the outcome of this story will be in court. however in this article there is a lot of information about binance that always says there is no physical office in any corner of the planet.

previous users will complain if ever binance policy changed and require a kyc because of this issue but they dont hate binance rather they hate the people that reports binance .

 its also like a blessing in disguise for binance because they will be on the headlines again and it was like free promotion  as what you said but there could also people that think negative towards binance , we cant avoid that.

Yeah! Why not look for the thieves instead. 
2 BTC every 24 hours. It will take a lot of time for them to launder it.
If I am the thief I won't go that way. I want it all handled as fast as I can with a little trace.
And to be exact.

There is no proof.
Of course Binance will answer this and will just say they are innocent about it. 

I am sure Binance will be found not guilty, and indeed this incident is not Binance's fault. Since the hacker is only taking
advantage of Binance's rules regarding withdrawals of 2 BTC there is no need for KYC procedures. And also an incident like
this will not damage Binance's reputation, there Binance will be increasingly popular with this news. It is highly likely that
Binance will change their system, the rules regarding KYC will be fully enforced to prevent this from happening again.