Binance allowed flagged accounts to process roughly $1.7 billion in cryptocurrency transfers after agreeing to a $4.3 billion U.S. plea deal, according to a report based on leaked internal records. The disclosure raises immediate questions about whether post-settlement controls and pledged independent oversight translated into effective day-to-day enforcement.
Leaked records raise doubts about post-settlement controls
The report focuses on internal alerts and subsequent activity that allegedly persisted across multiple years. The findings underscore concerns that promised surveillance and reporting enhancements may not have been implemented or enforced with sufficient rigor.
The leaked material describes a cluster of 13 accounts flagged by internal systems that continued moving high-risk funds across 2021–2025, with investigators tracing links to sanctioned or terror-linked actors. The report says some stablecoin transfers matched wallets later frozen by Israeli authorities for alleged terrorism financing, and one series involved about $29 million in Tether. The same review cites indicators of evasion and layering, including an account that registered 647 bank-detail changes over 14 months and cycled through 496 different accounts. These patterns are presented as red flags consistent with activity resembling an unregistered money-transmitting business.
A plea deal is presented as a negotiated settlement that resolves criminal charges without a full trial through acceptance of responsibility or punishment. The text frames Binance’s U.S. settlement as a corrective mechanism intended to address prior compliance failings and raise the bar for surveillance, reporting, and control effectiveness.
The records also describe compliance anomalies that allegedly went unremediated, including impossible login patterns across distant locations within hours and repeated failed identity verifications that did not trigger sustained blocking. The report argues these signals point to gaps in transaction monitoring, identity-proofing, and escalation protocols that are fundamental to AML control environments.
Binance publicly committed to strengthening oversight and accepted independent monitoring as part of its U.S. resolution, but the report argues the observed activity persisted anyway. The text suggests this indicates weak implementation, ineffective remediation, or both, despite the stated commitments. It also notes observers tying recent political developments—specifically a presidential pardon for the company’s former chief executive and reported commercial engagements involving the exchange and the political family—to possible changes in incentives for rigorous compliance. Those references are presented as potential complicating factors for enforcement dynamics and deterrence.
The text outlines three primary implications: credibility, counterparty exposure, and systemic risk. Continued high-risk activity would challenge confidence in post-settlement controls, increase legal and reputational exposure for counterparties and custodians relying on exchange attestations, and underscore cross-border infrastructure vulnerabilities that bad actors can exploit.