According to the International Association of Investigative Journalists (ICIJ), transaction records showing that approximately $900 million worth of Ethereum stolen by North Korea through hacking, or KRW 1.3 trillion in Korean money, were flowed into five Binance accounts during the money laundering process.
In the process of laundering North Korea’s hacking proceeds, a cryptocurrency exchange service called ‘Tor Chain’ was used to convert Ethereum to Bitcoin.
Looking at the transaction records of the five Binance accounts and Torchain in question during this period, it was found that transaction volume increased dramatically during the 10 days that were believed to be the time when North Korea’s money laundering was carried out.
It has not been confirmed whether these five Binance accounts are owned by North Korea.
However, Jonathan Reiter, CEO of Chainagos, a cryptocurrency transaction tracking company, explained, “The only source that could generate that much trading volume at that time was the Ethereum stolen by North Korea.”
The source of these funds is believed to be $1.5 billion, or about 2 trillion won worth of Ethereum, stolen by the North Korean hacking organization ‘Lazarus’ from an exchange in Dubai, United Arab Emirates in February of this year.
At the time, it was recorded as the largest cryptocurrency hack of all time.
ICIJ said that in order to conduct an accurate analysis, it looked at the transaction records of cryptocurrency exchanges such as Binance with about 20 blockchain experts and analysis companies from related academia and industry.
As a result, it was revealed that Binance did not block the dark money transactions of criminal organizations that commit various crimes such as human trafficking, drugs, and money laundering, and cited North Korea’s money laundering as a major example.
In addition to North Korea, Huiwon Group, which is known to be involved in large-scale fraud in Cambodia, has also been confirmed to have deposited at least $400 million, or approximately 600 billion won, into Binance.
ICIJ added that transaction records involving Mexican drug cartels, Chinese fentanyl drug trafficking organizations, and Russian money laundering organizations were also confirmed.
summary
Binance has poor AML (anti-money laundering) and KYC management.
Funds from North Korea’s Lazarus, drug cartels, and fraud organizations were laundered.