Crypto exchange Binance has been sued in a U.S. court by Japanese crypto exchange Fisco for allegedly facilitating the laundering of more than $9 million of stolen cryptocurrency.
On Monday, Fisco filed a complaint in the Northern District Court of California, saying that Binance’s “lax” know-your-customer (KYC) policies allowed cybercriminals to convert stolen crypto from Zaif to other crypto or cash. Fisco is the owner of the Zaif crypto exchange.
Zaif was hacked in September 2018 and lost around $63 million worth of cryptocurrency, including bitcoin, at the time. Fisco says in the complaint that “thieves who hacked Zaif eventually laundered 1,451.7 bitcoin through Binance,” according to blockchain analytics. The laundered bitcoin was valued at approximately $9.4 million at the time. Today it is worth more than $15 million.
Fisco says Binance’s KYC and anti-money laundering (AML) protocols are “shockingly lax and do not measure up to industry standards.”
It went on to say that Zaif contacted Binance staff shortly after the hack and requested them to freeze transactions and accounts involving the stolen bitcoin, but “Binance either intentiwith interestntly failed to interrupt the money laundering process when it could have done so.”
Zaif now seeks more than $9 million from Binance, with interest from the time of the hack, and “fair compensation for the time and money spent in pursuit of the property,” according to the complaint.
Binance declined to comment on the complaint to The Block when reached.
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