In brief

  • Binance played a role in the apprehension of three suspects in a Ukrainian money laundering crackdown.
  • The cybercriminals had laundered $42 million through exchanges over the past two years.
  • Three were arrested in June in connection with the crimes.

Crypto exchange Binance today revealed a secret security project that this year helped Ukrainian cyber police take down a criminal gang that authorities allege laundered $42 million through cryptocurrency exchanges over the past two years.

Binance’s security team worked together with RegTech firm TRM to identify transactions between Binance and “Bulletproof Exchanger”—exchanges with relaxed identity checks perfect for criminals laundering money.

At the start of this year, Binance “allocated additional resources” to look into the issue, according to a blog post today. What it found surprised them.

Tugging on a thread of “suspicious activity,” Binance, working with Ukraine’s Cyberpolice, unravelleda cybercriminal organization responsible for a ransomware campaign and the laundering of more than $42 million in cryptocurrencies over the last two years.”

Three arrests were made in June. Ukraine’s cyberpolice apprehended the suspects in the region of Poltava. They also found more than $200,000 worth of computer equipment and cash, as well as assault rifles, submachine guns and ammunition. 

The Cyberpolice in June wrote that the criminals laundered money on about 20 online exchanges, and placed advertisements on forums on the dark web. If convicted, the suspects face up to eight years in prison. 

But only today was Binance’s involvement disclosed. 

Binance, once reputed to evade authority, now plays a bigger role than ever. In November 2019 it signed a memorandum of understanding with the Ministry of Digital Transformation of Ukraine. 

The memorandum meant that Binance would help the Ukrainian government create “transparent and effective mechanisms” for crypto trading and “beneficial conditions for investments and business.” 

The crypto exchange wrote today in a press release about the laundering scoop: “For the health and sustainability of the entire industry, it is important to identify and help bring to justice those who abuse cryptocurrency and negatively affect the industry and its reputation.”