Binance sued for money laundering over stolen bitcoin. - page 3.

Zemomtum

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Quote from: logfiles on September 15, 2020, 09:30:02 AM

It's funny how they are seeking for compensation for the losses as if it's Binance that was responsible for the poor security protocols in their shit exchange that led to hackers being able to steal all that bitcoin in the first place.

The 2 BTC rate per day is too small to launder such amounts of money unless they used so many fake accounts which brings the question of, how were they able to trace that all the bitcoins the claim went through Binance?

What kind of hacker would move such amounts of BTC to a centralized exchange where they can easily seize it without thinking of mixing it?

There are a lot of tools to monitor the transfer of asset to and fro, TrackX is one of them and I have traced many transfer to centralized exchanges. If it was reported and Binance does not block the account from operation, they will be guilty I think, but I am not a lawyer. The only thing they have to do is evidence they own the said amount of BTC, the transfer sequence to Binance centralized exchange and the official report to Binance staff of such movement.

maxreish

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Let's admit that Binance has partly fault here.
First off, they have weak KYC protocols.
Second, they have high withdrawal limits.

That was few reasons why users grab the opportunity and took advantage of it. With those everyday withdrawals of 2 btc, haven't the Binance suspected some suspicious activity here? It's pretty obvious that money laundering activity is on going and they can actually freeze those transactions. However, I still doubt they can do such if the suspected users used different or multiple accounts.

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Quote from: ILuckyGuyI on September 15, 2020, 08:24:39 AM

This will be a good lesson for Binance to strenghten its security. It looks like it was easy for thieves to take advantage of 2 BTC limit for no KYC. I don't understand why a very good crypto exchange like Binance overlooked this. This incident could tarnish Binance's image.

You are right, but even if the limit was 0.001 btc, you could just create accounts non-stop, but that would also hurt the casual crypto dudes imo

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Quote from: mk4 on September 15, 2020, 07:23:50 AM

They're quite right though. It's quite easy to launder smaller amounts of money as the no-KYC limit is 2 BTC per day if I remember correctly. Not sure how they laundered 1,451 BTC without exposing their identity though. Probably stolen documents?

More like forged documents. Stolen stuff can be tracked, forged stuff can't.

Sadlife

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The exchange was not to blame in this case, Cryptocurrency is really hard to track, and you wouldn't know who's, who that's the sole purpose of anonymity. KYC could easily be bypassed, its not all safe. One could easily create fake ID's or steal identity from other people, its not like they could verify the ID in that country. Maybe that's the reason they're able to deposit huge amount of BTC.

bitsurfer2014

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I think that case will not prosper not unless the plaintiffs can prove Binance's knowledge in the hack and that it had wittingly and actively participated in laundering its funds.

Its like suing a bank because the robbers had deposited the money using several accounts which had been acquired in a proper way like e.g. (Binance level 1 unverified account) which is allowed to withdraw less than 2 BTC.

The element of Binance's guilty mind could be hard to prove in that situation and the plaintiffs had definitely have the burden of proof to convince the court of its case. Imho.

verita1

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Indeed, the stolen Bitcoin was divided into 7 thousand transactions in different accounts, taking advantage of the minimum withdrawal of 2 BTC every 24 hours.

Perhaps if with a security mechanism that detects the IP address of these transactions, the laundering of funds could be detected.

The accusing party alleged that it warned Binance in time and that it was negligent and could prevent the criminal act. Only the result of the investigation remains if Binance was able to prevent it and pay the lawsuit or demonstrate its good procedure.

iRaMMuS34

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Even though I don't favor Binance much, it's not their fault. Asking for a chargeback is plain stupid in this situation

pixie85

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Not your keys not your Bitcoins it doesn't matter that they were stolen. You gave them the keys you gave them the coins!

The moment those thieves got hold of the coins the exchange stopped being the owner. There are no returns or chargebacks with Bitcoin. They can't demand any compensation from Binance.

Also even if they have proof that coins were deposited on Binance that's not how KYC laws work. You can deposit without KYC and you can also withdraw without it just within small limits.

o_e_l_e_o

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Quote from: stompix on September 15, 2020, 12:13:58 PM

Binance has become toxic for this environment, worse than bitfinex and tether, I'm enjoying this from the bottom of my heart.

Agreed. Trying to stick their fingers in every pie - coinmarketcap, browsers, credit cards, etc - all while dumping trashcoins and scam ICOs on their users. They are trying to centralize the entire space for their own gain. It boggles the mind that people are apparently interested in financial independence, but also happy to continue to use and support entities like Binance.

Quote from: Bttzed03 on September 15, 2020, 12:32:03 PM

Regardless of who owned those bitcoins when it was deposited, they still came from the hacked exchange.

So if I anonymously trade peer-to-peer and buy some bitcoin which happens to have come from a hack, through no fault of my own I deserve to have my coins seized and my account frozen as soon as they touch an exchange? Whatever happened to fungibility?

Quote from: TalkStar on September 15, 2020, 12:54:54 PM

hopefully they will gonna make some changes on their no KYC withdrawal policy.

Hopefully!? Why are we hoping they are going to put in more strict KYC policies? More KYC and more privacy invasion is the last thing any of us should want.

I honestly can't understand why we would want more regulation, more oversight, more KYC, more privacy invasion, more subversion, more subjugation. The answer to an exchange being hacked is to stop holding your coins on exchanges, not to ask for governments to step in and take control.

yhiaali3

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I think the blame is not on Binance, if the attackers Hacked the exchange and steal this large amount of Bitcoin and transfer it to Binance, they could have transferred it to any other exchange!
But on the other hand, depositing this large amount of Bitcoin should raise questions with Binance and request Kyc and AML.
I suspect there is something strange or missing in this story.

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Quote from: logfiles on September 15, 2020, 09:30:02 AM

It's funny how they are seeking for compensation for the losses as if it's Binance that was responsible for the poor security protocols in their shit exchange that led to hackers being able to steal all that bitcoin in the first place.

The 2 BTC rate per day is too small to launder such amounts of money unless they used so many fake accounts which brings the question of, how were they able to trace that all the bitcoins the claim went through Binance?

What kind of hacker would move such amounts of BTC to a centralized exchange where they can easily seize it without thinking of mixing it?

I agree, to me this seems to be a veiled attack on binance and their policy of not exercising KYC on small transactions and to try to bring an end to this as it gives people a privacy that it is difficult to get these days.

However I find really difficult the Japanese exchange is going to win this, they are trying to make it seem as if Binance itself is involved when this is clearly not the case, after all the Binance exchange is so powerful that they do not need a few additional million dollars and it will be dumb to think they will risk their reputation over this, however I wonder if this will lead to a change on binance policies and if KYC will be mandatory for everyone from now on.

TalkStar

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Quote from: Traderbtcc on September 15, 2020, 09:53:22 AM

Those thieves really took advantage of the 2 bitcoin TX limit to avoid kyc, they were smart enough to split it and change it into different cryptos, but this looks really bad, this could tarnish the image of binance, allowing thieves to move stolen money into their exchange.

I think you may forgot that they are hackers and they usually keep all their plans ready before playing their final game. You can't expect that they will keep all the fund on the same address and will not mix it. I don't think it will put effect on binance reputation where hacked exchange security weakness is the main point here.

Quote from: Bttzed03 on September 15, 2020, 11:39:20 AM

I doubt Binance will be held liable for money laundering but I'm still interested on how this will pan out. If ever they're charged as guilty, that will probably force their hand to change the no KYC for 2 btc or less withdrawal policy. That will be another game changer and will shake the CEX leaderboard.

Yeap agree with you. Although i don't think they will charged as guilty but hopefully they will gonna make some changes on their no KYC withdrawal policy.

Bttzed03

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Quote from: o_e_l_e_o on September 15, 2020, 11:58:17 AM

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I never thought I'd say this, but I'm on Binance's side here. It is not their responsibility to cover for the mistakes and poor security of other exchanges. Someone contacting them and saying "Can you freeze these funds?", especially when those funds have come from multiple different addresses and could all have changed hands prior to reaching Binance, should not be sufficient for users to have their Binance accounts locked or frozen.

We should not be encouraging the development of a nanny state. If you want to use money which can be arbitrarily frozen or seized, then stick to fiat.

Like I said above, I also doubt Binance will held liable because I was also thinking it would be difficult to prove that the addresses used to transfer funds belong to the hacker/s. The accuser assumed they were and was expecting Binance to believe him but they didn't.

I was restating what was in the news and what was in that medium link you also shared as a response to the "it looks like Binance has some crystal ball to know that deposit X came from hacked bitcoin" statement. Regardless of who owned those bitcoins when it was deposited, they still came from the hacked exchange.

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Quote from: o_e_l_e_o on September 15, 2020, 10:44:59 AM

Quote from: logfiles on September 15, 2020, 09:30:02 AM

It's funny how they are seeking for compensation for the losses as if it's Binance that was responsible for the poor security protocols in their shit exchange that led to hackers being able to steal all that bitcoin in the first place.

Completely this. It is very similar to the Cashaa hack which was posted about a few months ago. Basically the CEO blaming the other exchanges for accepting the stolen coins and saying they should be shut down. It essentially boils down to "Our security was so bad, we want Big Brother to take over Bitcoin." Won't be long before exchanges start proposing chain rollbacks to fix their mistakes, oh wait, Binance already did that!

So when they were the ones affected they were ready to try to rollback all the chain, when they were not they didn't care even if the coins were sitting in their wallets to block the transactions, now, it's karma time.

I'm definitely grabbing some popcorn for tis one..
If the court decides it has jurisdiction over this since it involves US citizens, it's the end of the game for the stupid mantra of CZ with Binance operating from nowhere and everywhere, and his constant fleeing like a butterfly from HK to Japan to Malta to nowhere.

Binance has become toxic for this environment, worse than bitfinex and tether, I'm enjoying this from the bottom of my heart.

o_e_l_e_o

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Quote from: Bttzed03 on September 15, 2020, 11:39:20 AM

They don't need to have a crystal ball. The bitcoins allegedly sent by the hackers to Binance were not even mixed so it can be seen on the blockchain. As stated in the news, Binance was informed by the Japanese exchange but they never bothered to hold the funds.

I never thought I'd say this, but I'm on Binance's side here. It is not their responsibility to cover for the mistakes and poor security of other exchanges. Someone contacting them and saying "Can you freeze these funds?", especially when those funds have come from multiple different addresses and could all have changed hands prior to reaching Binance, should not be sufficient for users to have their Binance accounts locked or frozen.

We should not be encouraging the development of a nanny state. If you want to use money which can be arbitrarily frozen or seized, then stick to fiat.

Quote from: ChiBitCTy on September 15, 2020, 11:10:53 AM

There needs to be much more strict oversight..

Disagree. The whole point of bitcoin is to not have third parties which can control your money or what you do with it. Instead, the community needs to stop using and trusting these centralized exchanges, especially when they have proven themselves untrustworthy time and time again.

Bttzed03

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I doubt Binance will be held liable for money laundering but I'm still interested on how this will pan out. If ever they're charged as guilty, that will probably force their hand to change the no KYC for 2 btc or less withdrawal policy. That will be another game changer and will shake the CEX leaderboard.

Quote from: Slow death on September 15, 2020, 11:16:45 AM

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It was the fault of the poor security of the bag. What I can't understand this Japanese Exchange is accusing binance when they know it is their fault, it looks like Binance has some crystal ball to know that deposit X came from hacked bitcoin. What this Japanese exchange should do was ask for help with binance and not be accusing Binance

They don't need to have a crystal ball. The bitcoins allegedly sent by the hackers to Binance were not even mixed so it can be seen on the blockchain. As stated in the news, Binance was informed by the Japanese exchange but they never bothered to hold the funds.

Slow death

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Quote from: ?? on ??

A very strange story, maybe Binance is still involved in this scheme?

It was the fault of the poor security of the bag. What I can't understand this Japanese Exchange is accusing binance when they know it is their fault, it looks like Binance has some crystal ball to know that deposit X came from hacked bitcoin. What this Japanese exchange should do was ask for help with binance and not be accusing Binance

The incredible thing is that this Japanese stock market spent a lot of time digging into the binance location instead of worrying about knowing the identity of the hackers

seoincorporation

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That's a big amount of bitcoin, and they will spend the money necessary to recover them. But isn't binance fault to get those coins, the ones to send it there were the attackers. So, isn't fair for binance, they can't be tracking all de deposits and sending back the founds for those depo that comes from dirty coins. What if this proces is just another scam to stole now the bitcoins from Binance? A good group of lawyers could fuck us all if the right way to proceed is the legal way.

ChiBitCTy

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The history of all these exchanges should make any of this stuff make you think twice about whether this kind of stuff is poor protocols or if it's all done by design. Look at Coinbase's history for example. Years of no service, no real exchange upgrades etc all the while they were rolling in millions upon millions of dollars. Exchange freezes still happen there.. why? I don't trust any of these exchanges, every one of them has a laundry list of things exposing their true nature. There needs to be much more strict oversight.. it seems like to me the ones who have it likely aren't doing it legitimately ( think Wolf of Wall Street where they hired their own compliance officer to say everything's all good and compliant but it was pure smoke and mirros)

Topic: Binance sued for money laundering over stolen bitcoin. - page 3. (Read 904 times)