Binance’s number one commitment is to protect users and help keep the ecosystem safe from bad actors. Recently, Binance’s Investigations team worked with The Fiscal Information and Investigation Service (FIOD), an agency of the government of the Netherlands responsible for investigating financial crimes, in a gambling platform exit scam where Binance helped freeze millions of euros.
Reported by FIOD, the suspect was arrested on April 29 for suspected fraud, embezzlement and money laundering and the investigation is focused on a large-scale scam surrounding the alleged gambling platform, ZKasino. “ZKcasino presented itself as a gambling platform and blockchain casino. Investors were led to believe that they would get their investments back within 30 days. However, this did not happen. The technical way the smart contract was set up on the blockchain also suggests that this return was not intended.”
After getting alerted by the community, the Binance Investigations team proactively researched the case and worked across its internal and external Investigations and Sanctions teams to collect and verify the open source intelligence (OSINT) information. Then alerted law enforcement on the account holder connected to the fraud. Binance helped locate client accounts and provided some tracing to help unfold details in the case.
Binance’s compliance procedures and controls played a key role in countering the suspect who attempted to abuse the platform. Our anti-money laundering detection and analytics tools and expertise allowed our Investigations and Sanctions team to detect suspicious activity, which prompted a thorough review of potential Binance exposure, and risks associated with the accounts involved. Blockchain analytics tool supplied by TRM Labs, our industry partner, helped attribute the addresses to ZKasino. Binance then shared intelligence with law enforcement to help the investigation of the exit scam and assisted with freezing the ill-gotten funds.
This is an ongoing investigation and according to FIOD, “more arrests are not ruled out.”
Binance recognizes that it has an immense responsibility as an industry leader to safeguard the global crypto ecosystem and its users from bad actors. The company has built and maintained the industry’s leading and most robust investigations task force to ensure users and investors are protected. Binance continues to lead close collaborations with law enforcement agencies and regulators worldwide, allowing the organization to remain at the forefront of fighting cyber financial crimes globally.
Overall, Binance has been instrumental in addressing a number of significant security threats and major crimes including terrorist financing, child sexual abuse material distribution, nation-state hacking, intellectual property theft, narcotics smuggling, and investment scams. Last year, Binance’s dedicated teams responded to over 58,000 law enforcement requests – with an average of three days response time, which is faster than any traditional financial institution – and held some 120 training sessions to share expertise with law enforcement worldwide.