Binance’s Post-2023 Plea Deal: Did Flagged Accounts Keep Trading?
Binance faces fresh scrutiny over its compliance engine. The exchange's 2023 plea deal was meant to be a turning point—a reset. But new allegations suggest the system may have had a critical bypass.
The Core Allegation
Reports claim certain accounts, already flagged for potential violations, maintained trading access after the landmark settlement. This isn't about a technical glitch; it's about the integrity of the gatekeeping process itself. If true, it exposes a gap between regulatory theater and on-chain reality.
Compliance as a Feature
For major exchanges, robust compliance isn't just a legal requirement—it's the core product. Trust is the only real asset. When that trust erodes, everything else is just code and server racks. The market's reaction will be the ultimate audit, a far more ruthless one than any government agency could conduct.
Where does this leave the industry? Watching. Every move by the giants sets a precedent, for better or worse. The next cycle won't be won by who has the most tokens, but by who has the cleanest books. After all, in traditional finance, they fine you a percentage of profits; in crypto, they can erase the entire enterprise overnight—a delightful upgrade in efficiency.
Binance accounts showed alleged suspicious activity
The Financial Times claims it investigated 13 different Binance accounts and allegedly found suspicious flows of $1.7 billion in crypto, including $144 million after November 2023, the same day Binance agreed to clean house.
One Venezuelan woman, who registered on Binance in 2022, received over $177 million in crypto in under two years, allegedly using 496 different bank accounts to off-ramp funds across the Americas.
The 13 accounts received at least $29 million in Tether from wallets later frozen by Israel under anti-terrorism laws. Most of that came from four wallets tied to Tawfiq Al-Law, who was accused of funneling money for Hezbollah, the Houthis, and a Syrian firm connected to the Assad regime. These wallets were seized in May 2023 and sanctioned by the U.S. Treasury in March 2024.
In one bizarre case, a man from Brazil registered with a damaged ID card from 20 years ago, where even his date of birth was unreadable. The email on file belonged to a completely different woman. He was later charged for helping a group that smuggled illegal gold. When stopped at the Venezuelan border with $50,000 in cash, he told guards it was to “buy sausages from a Chinese acquaintance.”
His Binance account showed he received $16 million, with at least $5 million tied to the Al-Law wallets. Binance documents showed the man’s net worth at $400,000, but he withdrew $4 million in hard currency before going inactive in late 2022. The account, however, stayed open into 2025.
Carter-Ruck, Binance’s legal team, said: “Any suggestion that our client has knowingly facilitated bad actors in criminal conduct is also baseless.” They also claimed none of the wallets were marked for terror financing at the time and insisted no alerts were triggered by major blockchain tracking tools.
Former CEO Changpeng Zhao, better known as CZ, was pardoned by President TRUMP in October after being charged with “willfully violating anti-money-laundering laws.”
The WHITE House defended the pardon, saying Trump was correcting overreach by the Biden administration in its “war on cryptocurrency.”
CZ remains barred from executive roles at Binance, but his longtime business partner He Yi, who shares three children with him, was just named co-CEO this month.
The Treasury Department had earlier blasted Binance for failing to report over 100,000 suspicious transactions, tied to crimes including child exploitation, ransomware, drug trafficking, and terrorism.
And now, in November, 306 families of October 7 2023 attack victims filed a lawsuit accusing Binance of enabling Hamas and Hezbollah to launder millions through its platform.
Binance called those claims “grotesquely sensationalist” and continues to deny wrongdoing.
Sign up to Bybit and start trading with $30,050 in welcome gifts
