In a scathing critique, former US Securities and Exchange Commission (SEC) official John Reed Stark has brought attention to the alleged criminal violations of cryptocurrency exchange Binance and its CEO, Changpeng Zhao (CZ).
Stark’s comments shed light on the serious ramifications of these alleged violations, dismissing attempts by what he refers to as the “Big Crypto Cartel” to “downplay” the significance of the Department of Justice (DOJ), Financial Crimes Enforcement Network (FinCEN), and Commodity Futures Trading Commission (CFTC) prosecutions.
Binance Accused Of Facilitating Crime
In his remarks on X (formerly Twitter), Stark emphasizes that the charges against Binance and CZ extend far beyond mere “grift and chicanery”. According to Stark, they encompass matters of “life, death, murder, child sex abuse, and other forms of mayhem”, highlighting the severity of the allegations.
One crucial point Stark raises is the alleged failure of Binance to implement comprehensive programs to prevent and report suspicious transactions involving terrorists, ransomware attackers, money launderers, and other criminals.
Stark specifically mentions the failure to identify and report transactions associated with terrorist organizations such as Al Qaeda, ISIS, Hamas’ Al-Qassam Brigades, and Palestinian Islamic Jihad (PIJ).
By neglecting anti-money laundering (AML) and sanctions obligations, Binance is accused of enabling illicit actors to conduct transactions freely on its platform, even facilitating transactions involving child sexual exploitation material and darknet markets.
Trades Involving Sanctioned Individuals
Stark further highlights Binance’s alleged failure to report over 100,000 suspicious transactions, including those associated with ransomware attacks, terrorist financing, and illicit activities on the darknet.
Despite being one of the largest recipients of ransomware proceeds, Binance purportedly failed to report these transactions to the appropriate authorities, according to Stark.
Moreover, the exchange allegedly played a role in facilitating transactions involving illegal narcotics, counterfeit goods, fraud-related activities, and other contraband.
Stark further suggests that the seriousness of “Binance’s violations” is underscored by the staggering $4.3 billion payment it was compelled to make to the US government. Stark claimed:
This mammoth settlement reflects the egregious nature of Binance’s conduct, the high volume of its transactions, and senior management’s involvement. Between August 2017 and October 2022, Binance executed more than 1.67 million virtual currency trades on its Binance.com platform between U.S. persons and users in sanctioned jurisdictions and blocked persons.
Overall, Stark’s remarks paint a grim picture of the exchange’s alleged activities, characterizing it as a global felonious enterprise responsible for a devastating crime wave.
Featured image from Shutterstock, chart from TradingView.com