As Trump vigorously promotes cryptocurrency and the crypto business progressively enters the mainstream, funds from scammers and numerous prison organizations are repeatedly flowing into main cryptocurrency exchanges.
Written by: David Yaffe-Bellany, Spencer Woodman, and Sam Ellefson
Translated by: Luffy, Foresight Information
President Trump has based his personal cryptocurrency enterprise and has vowed to make the United States the international “crypto capital.” Cryptocurrency firms are touting the security and reliability of their platforms, and a variety of mainstream industries—from Wall Road banks to on-line retailers—are additionally experimenting with crypto companies.
Nonetheless, in line with a joint investigation by the Worldwide Consortium of Investigative Journalists, The New York Occasions, and 36 different international information organizations, at the same time as the crypto business good points mainstream recognition, no less than $28 billion in illicitly linked funds have flowed into cryptocurrency exchanges over the previous two years.
These funds originate from hackers, thieves, and extortionists, with sources starting from North Korean cybercrime teams to rip-off syndicates working from Minnesota in the United States to Myanmar. The investigation reveals that these prison teams have repeatedly transferred funds into the world’s main cryptocurrency exchanges—on-line platforms that allow the change of {dollars}, euros, and cryptocurrencies akin to bitcoin and ethereum.
Binance, the world’s largest cryptocurrency change, is one in all the recipients of this “soiled cash.” In Could this yr, Binance reached a $2 billion enterprise cope with Trump’s cryptocurrency firm. The investigation additionally revealed that soiled cash has flowed into no less than eight different well-known exchanges, together with Okx, a worldwide platform with rising affect in the U.S. market.
Julia Hardy, co-founder of crypto investigation agency zeroShadow, identified: “Legislation enforcement is solely unable to maintain up with the countless unlawful actions in this discipline. This case can’t be allowed to proceed.”
In the early days of cryptocurrency growth, it turned a gathering place for thieves and drug sellers. The velocity and anonymity of crypto transactions make it a wonderful instrument for cash laundering. As the most consultant digital foreign money, bitcoin as soon as supported transactions on darkish net markets, the place unlawful distributors offered medication and different contraband.
Since then, the crypto business has grown exponentially and change into more and more professionalized, with day by day authorized buying and selling volumes reaching billions of {dollars}. Main exchanges have pledged to crack down on the use of crypto for illicit fund transfers. In 2023, Binance admitted to cash laundering-related crimes for processing transactions for terrorist organizations akin to Hamas and al-Qaeda, and agreed to pay a $4.3 billion positive to the U.S. authorities. Final yr, Binance additionally declared that the crypto business “will present zero tolerance for criminals.”
President Trump’s sons Eric and Donald level to a promotional marketing campaign that features the Trump household’s crypto enterprise, World Liberty Monetary
In the meantime, Trump has made crypto enterprise a core a part of his household enterprise and has ended regulatory crackdowns on the business. On the eve of the 2024 election, he and his sons co-founded a crypto startup referred to as World Liberty Monetary. With its partnership with Binance, the firm is predicted to generate tens of thousands and thousands of {dollars} in annual income. Final month, Trump pardoned Binance founder Changpeng Zhao, who had beforehand been sentenced to 4 months in jail underneath an organization plea settlement.
The Trump administration has additionally weakened legislation enforcement’s potential to carry crypto criminals accountable. In April this yr, the U.S. Division of Justice disbanded a particular crypto crime enforcement group and declared that prosecutors ought to concentrate on terrorists and drug sellers utilizing crypto, relatively than holding “the platforms these prison organizations depend on for unlawful actions” accountable.
As a result of many prison accounts haven’t been publicly uncovered, this investigation by The New York Occasions and its companions solely reveals the tip of the iceberg relating to illicit funds at exchanges. Nonetheless, that is the first systematic fund-tracing investigation focusing on particular platforms.
Whether or not exchanges are breaking the legislation requires particular evaluation. Even when they course of soiled cash, some firms should still be fulfilling their authorized obligations, akin to using compliance workers to display for fraud. However in the U.S., if a crypto firm fails to ascertain strong inside anti-money laundering mechanisms, it might be sued for violating the Financial institution Secrecy Act.
This investigation is partly based mostly on information from blockchain analytics agency Chainalysis (which didn’t specify the exchanges concerned). The New York Occasions and the Worldwide Consortium of Investigative Journalists additionally used public data and consulted forensic specialists to establish crypto accounts linked to prison exercise. As a result of crypto transactions are recorded on public ledgers, fund flows will be traced to particular exchanges.
Binance founder Changpeng Zhao
Primary findings of the investigation embody:
- Since Binance’s responsible plea, Cambodia’s Huione Group has transferred over $400 million to its accounts. Huione Group has been designated a prison entity by the U.S. Treasury Division. As well as, this yr, $900 million flowed into Binance deposit accounts from a platform utilized by North Korean hackers for cash laundering.
- In February this yr, Okx reached a $504 million settlement with the U.S. authorities for violating fund switch legal guidelines. Inside 5 months of the settlement, the platform obtained over $220 million from Huione Group.
- In keeping with Chainalysis, in 2024, no less than $4 billion in scam-related funds have been obtained by international crypto exchanges. The New York Occasions and the Worldwide Consortium of Investigative Journalists interviewed 24 crypto rip-off victims, whose stolen funds in the end flowed into main exchanges akin to Binance, Okx, Bybit, and HTX.
- Final yr, over $500 million flowed from crypto cash-out outlets into Binance, Okx, and Bybit. These outlets, largely brick-and-mortar, present crypto-to-cash change providers for all types of consumers, and likewise provide a handy channel for prison teams to money out crypto.
Binance spokesperson Heloiza Canassa said, “Safety and compliance are the core pillars of our operations.” Since its founding in 2017, Binance has responded to over 240,000 legislation enforcement requests, together with 65,000 final yr alone.
Okx Chief Authorized Officer Linda Lacewell stated the firm actively cooperates with legislation enforcement to fight fraud and different unlawful actions, and has invested closely in compliance administration, transaction monitoring, and fraud detection instruments.
HTX didn’t reply to a request for remark; a Bybit spokesperson stated the firm has a “zero-tolerance strict coverage” towards monetary crime. The White Home declined to remark; a World Liberty Monetary consultant stated the firm solely regards Binance as a crypto buying and selling platform, not a enterprise accomplice.
The vacation spot of soiled cash after coming into exchanges is usually troublesome to hint, and the fund path disappears. If exchanges detect unlawful transactions in time, they might freeze the funds and hand them over to legislation enforcement.
John Griffin, a crypto professional at the College of Texas at Austin, identified: “If criminals are cleared from the platform, exchanges will lose a significant income. Due to this fact, they really have an incentive to permit such unlawful actions to proceed.”
The Black Industry Chain Linked to Exchanges
Huione Group has intensive enterprise operations in Cambodia, participating in banking, funds, insurance coverage, and extra as a big monetary group. Locals can use its QR codes to pay for buying and meals.
However behind these reliable companies lies a sinister prison community.
Legislation enforcement revealed that for years, Huione Group has additionally operated an enormous unlawful digital buying and selling platform. Some specialists describe it as “Amazon for criminals,” the place distributors promote stolen private info, rip-off tech assist providers, and cash laundering providers. The group has additionally offered fund switch providers for North Korean hackers and a number of Southeast Asian rip-off syndicates.
In Could this yr, the U.S. Treasury Division ordered Huione Group to be lower off from the U.S. banking system, calling it a “core hub” for cyber theft and funding scams focusing on Individuals.
Throughout this era, Huione Group’s monetary dealings with Binance and Okx continued uninterrupted.
Final yr, Huione Group disclosed a number of crypto pockets addresses in a Chinese language monetary report. These lengthy strings of letters and numbers are key identifiers for accounts on the public crypto ledger. Investigation reveals that from July 2024 to July 2025, Huione Group transferred over $400 million to Binance. In the first 5 months of this yr, Okx obtained over $220 million in deposits from Huione Group’s associated wallets.
Even after the U.S. Treasury’s ban on Could 1, fund transfers continued. The journalists’ investigation discovered that in the two and a half months after the ban, Huione Group’s wallets transferred no less than $77 million to Binance and $161 million to Okx.
Huione’s Phnom Penh department in Cambodia; the U.S. authorities calls Huione a “key node” for cyber theft and funding scams
Each Binance and Okx have earlier violations of economic rules, resulting in prison settlements with the U.S. authorities. Each platforms have pledged to rectify compliance points.
Okx’s Lacewell stated that as early as earlier than Could this yr, the firm had launched “enhanced transaction monitoring” on one in all the pockets addresses talked about in Huione Group’s report, and in October totally terminated all enterprise dealings between Okx wallets and Huione Group.
Binance’s Canassa said that the change can not intercept or reverse incoming transactions, however will take applicable motion as soon as suspicious deposits are detected. She emphasised: “The key to measuring a crypto change’s compliance is its actions in figuring out and responding to suspicious deposits. On this regard, Binance is an business chief.”
Nonetheless, the influx of Huione Group’s funds continued for months. Furthermore, after Binance’s settlement with the U.S. authorities, it obtained extra than simply this one suspicious fund.
In February this yr, North Korean hacker group Lazarus Group hacked Bybit in Dubai, UAE, stealing $1.5 billion value of crypto, making it the largest crypto theft in historical past.
Inside days, the hackers transferred the stolen funds to a crypto change platform, changing ethereum into bitcoin, the world’s largest cryptocurrency by market cap.
Crypto ATMs can be utilized to transform money into cryptocurrency
In keeping with crypto monitoring agency ChainArgos, at the similar time as the hackers have been exchanging currencies, 5 Binance deposit accounts out of the blue obtained $900 million value of ethereum from the change platform—a extremely uncommon influx.
ChainArgos CEO Jonathan Reiter identified that though these funds flowing into Binance might not belong to the North Korean hackers, the change truly turned the closing hyperlink in the hackers’ cash laundering chain, serving to to launder a whole lot of thousands and thousands in stolen crypto.
Reiter stated that from the timeline, “the solely cheap supply for these outgoing ethereum is the stolen funds,” which ought to have been flagged as soiled cash. “Binance ought to have detected this anomaly—even poor or flawed screening instruments ought to have caught this type of difficulty.”
Concerning this fund influx, Canassa didn’t reply instantly, solely emphasizing that Binance “has constructed a complete and multi-layered compliance and safety system.”
Elaborately Crafted Scams
Final yr, a father in Minnesota stumbled upon an “funding alternative.” Following the steering of a household monetary agency based mostly in Seattle and Los Angeles, he engaged in crypto buying and selling, just for the funds to fade—in the end shedding $1.5 million to scammers.
In March this yr, he wrote to the FBI: “My household and I are usually not solely in monetary spoil, but in addition struggling emotionally.” To guard his privateness, he requested anonymity.
The stolen funds haven’t been recovered. Nonetheless, in line with a crypto information agency commissioned by the sufferer, greater than $500,000 of it in the end flowed into main exchanges.
Such scams have change into a significant downside in the crypto business, with many aged buyers, singles, and even financial institution presidents falling sufferer. FBI information reveals that final yr, crypto funding scams brought on $5.8 billion in losses to victims.
Certainly one of the most typical rip-off sorts is the “pig-butchering” rip-off. Originating from a Chinese language time period, it refers to scammers “fattening up” victims earlier than defrauding them. Scammers usually pose as admirers, have interaction in flirtatious relationships with victims for days or perhaps weeks, after which lure them into pretend crypto investments.
The individual in the picture, Shan Hanes, is president of Heartland Tri-State Financial institution in Elkhart, Kansas, who was convicted of embezzlement final yr after shedding funds in a crypto rip-off
Crypto exchanges play a key position in these scams, serving as handy channels for scammers to transform illicitly obtained crypto into money.
Scammers’ identities are sometimes onerous to hint, however the Minnesota case presents a glimpse into Binance’s inside methods.
By regulation, crypto exchanges should conduct KYC procedures earlier than opening accounts, accumulating detailed private info to forestall fraud.
At the request of a Minnesota police subpoena, Binance submitted info on two accounts linked to the pig-butchering rip-off. In just some months from 2023 to 2024, the first account had over $7 million in transactions. The account picture confirmed a lady standing in entrance of a corrugated metallic wall, with a registered tackle in a Chinese language village.
The second account was registered to a 24-year-old girl from rural Myanmar. By mid-2024, the account had over $2 million in transactions in 9 months—greater than 1,000 occasions Myanmar’s common annual wage.
Erin West, head of an anti-fraud nonprofit and former prosecutor, reviewed the info and identified that these two ladies have been seemingly “cash mules,” whose private info might have been stolen by scammers to register pretend Binance accounts. She stated: “These accounts don’t have any legitimacy in any respect; we have seen this type of factor numerous occasions.” Binance declined to remark.
For scammers hundreds of miles away, legislation enforcement is usually powerless.
Fifty-eight-year-old Carrissa Weber from Alberta, Canada, was induced by a scammer posing as a startup supervisor to speculate in crypto this yr, shedding her life financial savings of $25,000. Weber reported to Canadian police, however the stolen funds haven’t been recovered.
She stated helplessly: “My case is simply sitting there, and nobody is dealing with it.”
An evaluation of Weber’s transaction data reveals her stolen funds flowed into a number of crypto wallets, in the end ending up on Okx. Okx’s Lacewell stated the two accounts receiving the funds had been underneath monitoring for “suspicious traits” since final yr, however weren’t frozen till October this yr—six months after Weber was scammed.
Grey Channels for Cashing Out Crypto
In the again of a deli in Kyiv, Ukraine, previous cabinets of snacks and sodas, urgent an digital doorbell opens a door marked “Forex Change.”
Inside is a brick-and-mortar store specializing in crypto change. On the desk is a invoice counter, an previous plastic calculator, and a field filled with rubber bands for bundling stacks of money.
Crypto specialists and legislation enforcement say these crypto cash-out outlets, discovered all through Asia and Japanese Europe, have change into new hubs for international cash laundering crime.
Anybody can stroll into these outlets, usually with out displaying ID, and change massive quantities of crypto for {dollars}, euros, or different fiat currencies. In keeping with crypto analytics agency Crystal Intelligence, final yr such crypto change outlets in Hong Kong dealt with over $2.5 billion in transactions.
Richard Sanders, a crypto monitoring professional who has lengthy studied these outlets, stated: “These outlets might present limitless laundering house for all types of economic crime.”
Many crypto cash-out outlets depend on main exchanges for his or her enterprise. Crystal’s information reveals that final yr, Binance, Okx, and Bybit collectively obtained $531 million from these foreign money change outlets.
Crystal Chief Intelligence Officer Nick Sensible stated: “We discovered that many of those outlets require no ID, and there are mainly no limits on change quantities.”
At some point in July this yr, after arranging a deal by way of Telegram, a reporter transferred $1,200 in crypto to the change level inside the Kyiv deli. Minutes later, the store workers handed him a stack of money bundled with thick rubber bands, offered no receipt, and deleted the Telegram chat after the transaction. The change level didn’t reply to a request for remark.
Over a number of weeks this yr, the Worldwide Consortium of Investigative Journalists collected pockets addresses from a dozen such brick-and-mortar outlets in Ukraine, Poland, Canada, and the UAE.
Transaction data present that these wallets largely obtained funds from main exchanges. This implies customers wishing to money out would first switch funds from their change accounts, then to those outlets for conversion.
On the forty first ground of a glass workplace tower in Dubai, a reporter noticed a buyer change $6,000 in crypto for a stack of UAE banknotes at a money change level. Evaluation of the store’s crypto tackle confirmed it obtained over $2 million in crypto in two weeks in September, together with $303,000 from Binance.
