ICIJ probe links major crypto exchanges to global money-laundering networks

The International Consortium of Investigative Journalists (ICIJ) investigative reports into crypto, called the Coin Laundry, have accused major crypto exchanges such as Binance, OKX, Coinbase, Kraken, Bybit, and Kucoin of contributing to money laundering operations. 

In partnership with more than 100 journalists from more than 35 countries, ICJ collected hundreds of crypto wallet addresses associated with North Korean cyber thieves, Russian money launderers, and large-scale scam operations. 

They used the wallet addresses and traced tens of thousands of crypto transactions recorded on blockchains, finding that illicit actors had either set up accounts at some of the largest exchanges or sent tainted funds to accounts there.

In a statement, ICIJ Executive Director Gerard Ryle asked, “Our investigation raises urgent questions: How complicit are major crypto exchanges in enabling criminal activity? And why are regulators struggling to keep pace with a financial system that thrives on opacity and speed?” 

Binance leads in illegal fund transactions 

CZ and his company, Binance, had both pleaded guilty in November 2023 to operating without basic safeguards to prevent money laundering. They had been accused of  authorizing transactions bound for “terrorists, cybercriminals, and child abusers.”

However, as reported by Cryptopolitan, CZ was pardoned by Trump. Between the guilty pleas and Zhao’s pardon, Binance continued to profit from hundreds of millions of dollars in crypto transactions linked to some of the world’s most notorious organized crime groups, according to an analysis by the ICIJ.

While the company was under the supervision of court-appointed monitors, at least $408 million worth of crypto flowed to Binance accounts from Huione Group. This is a Cambodia-based financial firm used by Chinese crime gangs to launder proceeds from human trafficking and industrial-scale scam operations.

Additionally, in February, OKX had pleaded guilty in the US to operating an illegal money transmitter and agreed to retain a court-mandated compliance consultant. However, even after that oversight, customer accounts at OKX continued to receive hundreds of millions of dollars from Huione. 

ICIJ also found that Binance is linked to Mexico’s violent Sinaloa drug cartel. It received nearly all its funding, more than $700,000, from accounts at Coinbase.

Additionally, ICIJ found that funds from a notorious ring of Chinese traffickers of fentanyl and other drugs flowed to various accounts at OKX. The funds also flowed to a Russian money launderer specializing in moving crypto for North Korea’s weapons program, who maintained an account at HTX. 

This account was active as of August. By then, Sun owned $75 million worth of the Trump family’s crypto. This made him one of the largest investors in their crypto venture, World Liberty Financial.

ICIJ says blockchain analytics firms hesitant to expose crypto exchanges

The Coin Laundry’s findings reveal how crypto companies profit from illicit activity with minimal fear of consequences, while leaving those harmed by the criminals who use them without recourse. In the US alone, the FBI estimates Americans lost $9.3 billion to crypto crimes in 2024, a 67% increase from the previous year. 

ICIJ argued that although the industry claims crypto is easier to monitor because transactions are recorded on a blockchain, police often struggle to act on illicit crypto movements. This is because the assets frequently pass through several anonymous wallets. 

In response, Coinbase said that it was aware of the transactions relating to the cartel. The exchange also stated that through communications with the US government, the wallet address was being sanctioned.

Additionally,  in response to drug trafficking wallets, OKX said that it proactively worked with law enforcement on this matter and was privately thanked for its efforts. 

The ICIJ also found that some of the biggest blockchain analytics firms, which position themselves as industry watchdogs, are hesitant to name mainstream crypto exchanges in relation to dirty money publicly. 

In its research, the ICIJ relied on more than two dozen individual blockchain analysts, including industry experts and academics, as well as a range of analytics firms, such as Crystal Intelligence and ChainArgos. 

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