Binance sued for allegedly facilitating money laundering with 'lax KYC'

Binance sued for allegedly facilitating money laundering with 'lax KYC'


Binance’s famously light Know Your Customer requirements are being targeted by the current owners of Zaif, a Japanese cryptocurrency exchange that got hacked in 2018.

Plaintiffs are claiming that its weak KYC requirements and high daily withdrawal limit facilitated the laundering of $60 million stolen from the exchange. The lawsuit was filed in the Northern District of California by representatives of Fisco cryptocurrency exchange, which acquired Zaif soon after the hack.

Fisco is accusing Binance of helping launder $9 million in cryptocurrency, and is seeking compensation for these alleged losses. The plaintiffs maintain that Binance had the power to identify and stop the stolen assets due to the traceable nature of blockchain.

A significant portion of the case document seeks to demonstrate why Northern California is the proper jurisdiction for suing Binance, which has a globally distributed team and is likely to be legally based in a tax haven country.

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The first line of argument is that Binance’s servers

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