Investigative work by Reuters suggests Binance has processed more than $2.35B in crypto originating from hacks, fraud, and illegal drug sales. The volume of illicit crypto processed by Binance has plummeted since it established KYC/AML protocols, but the crypto exchange has still failed to cooperate with cybercrime investigators on several occasions since then.

Why should we care?
Binance’s function as a host for illicit funds may not just be an oversight, but actually by design. Three months after Binance CEO Changpeng Zhao founded the company in 2017, he told his employees to “do everything to increase our market share, and nothing else,” and that “profit, revenue, comfort, etc., all come second.” Though illicit crypto represents a relatively small fraction of Binance’s overall volume, such a “grow fast break things” ethos would identify fraudulent activity as not a casualty of rapid growth, but a potential fuel for it. That one of the largest crypto exchanges is responsible for such a level of malfeasance should make lawmakers reconsider the idea that crypto can police itself. In particular, Tuesday’s bipartisan Senate bill on crypto, which would create a FINRA-esque body for the crypto industry, doesn’t have enough teeth to make Binance or other crypto institutions truly secure people’s digital assets. If anything, self-regulation would make fraud all the more compelling as a vehicle for growth.