FinCEN Lists Binance Among the Largest Bitcoin Partners of Bitzlato, a Suspicious Russian Crypto Platform

The Financial Crimes Enforcement Network of the United States (FinCEN) claims that Binance is connected to the illegal crypto platform Bitzlato.

In an order published on January 18, FinCEN stated that Binance was among the ‘three largest other counterparties’ of Bitzlato in bitcoin transactions.

According to the authority, Binance was among the largest other counterparties that received bitcoin from Bitzlato between May 2018 and September 2022. Other counterparties included the Russia-linked darknet market Hydra and the alleged Russian Ponzi scheme known as ‘Finiko’, FinCEN highlighted.

On the other hand, FinCEN did not mention Binance as one of the top three other counterparties on the sender’s side. According to the document, the largest bitcoin senders to Bitzlato between May 2018 and September 2022 were Hydra, the Finnish P2P exchange LocalBitcoins, and Finiko.

– Approximately two-thirds of Bitzlato’s largest other counterparties are linked to darknet markets or scams – wrote FinCEN.

The agency noted that between 2019 and 2021, Bitzlato received cryptocurrencies worth 206 million dollars from darknet markets, 224 million dollars from scams, and 9 million dollars from ransomware hackers.

The news comes after several U.S. regulatory agencies launched major enforcement actions against Bitzlato, accusing the company of money laundering and allegedly circumventing sanctions against Russia. As part of the case against Bitzlato, the FBI arrested Bitzlato’s founder Anatoly Legkodymov on January 17 in Miami.

Unlike major crypto exchanges like Binance or Coinbase, Bitzlato was a lesser-known platform. Founded in 2016, the platform reportedly has an office in the Federation Tower skyscraper in Moscow.

Binance’s alleged involvement in the Bitzlato case raises some concerns regarding the exchange’s operations and potential ties to Russia. As previously reported, Binance was among the crypto exchanges that decided to continue providing services to unsanctioned Russians after the European Union adopted the eighth package of sanctions against the country.