An investigative report by ICIJ reveals that major cryptocurrency exchanges like Binance and OKX continued processing hundreds of millions of dollars in transactions linked to money laundering, drug trafficking, and cybercrime—even after pleading guilty to anti-money laundering violations and being placed under court-ordered monitoring.
Crypto giants transferred billions connected to money laundering, drug cartels, and North Korean cybercriminals
The investigation found that between 2023-2025, at least $408 million from Cambodia-based Huione Group (used by Chinese crime gangs for scam operations) flowed through Binance, while OKX received over $226 million from the same source, including $161 million after Huione was officially designated a money laundering concern by the U.S. Treasury.
The report also documents how these exchanges facilitated transactions for North Korean hackers (who stole $1.5 billion from Bybit exchange), Russian money launderers, and Mexican drug cartels, while victims who lost billions to crypto scams received little help from overwhelmed law enforcement.
Systemic Failures and Regulatory Gaps
The investigation highlights systemic failures in crypto regulation, with exchanges prioritizing transaction fees over compliance, understaffed regulatory agencies struggling to provide oversight, and the Trump administration rolling back enforcement actions—including pardoning Binance founder Changpeng “CZ” Zhao despite his guilty plea for operating without proper money laundering safeguards.
- Incentive to Continue: The report highlights that exchanges largely derive revenue from transaction fees. Experts suggested that if exchanges “kick criminal actors off the platform,” they lose a large revenue source, giving them an incentive to allow the activity to continue.
- Weak Oversight: Law enforcement efforts are hampered by a patchwork of global laws and fragmented enforcement. In the U.S., crypto firms are held to lower standards for preventing money laundering than traditional banks and are overseen by the IRS’s small-business division, which has reportedly struggled to adequately oversee the industry.
- Difficulty in Tracing: Although crypto transactions are recorded on a blockchain, criminals use various techniques, such as automated swapping services, to obscure the origin of funds, making it difficult for law enforcement and compliance teams to keep pace.
Exchanges Facilitated Billions in Illicit Funds
The investigation traced tens of thousands of transactions, revealing that major crypto trading platforms were frequently used to move “dirty money” for criminal organizations. The findings highlighted the urgent need for stricter regulations and enhanced monitoring systems within the cryptocurrency industry. Authorities are now calling for greater collaboration between governments and trading platforms to combat illicit activities and ensure transparency in digital transactions.
- Binance and OKX transactions: Both exchanges were linked to enormous financial flows from the Huione Group, a Cambodia-based firm used by Chinese crime gangs for laundering proceeds from human trafficking and large-scale scam operations.
- Binance received at least $408 million from Huione accounts even after the company pleaded guilty to anti-money laundering violations in November 2023 and was under court-appointed monitoring.
- OKX received over $161 million from Huione accounts after the U.S. Treasury Department designated Huione as a primary money laundering concern in May.
- North Korean Hackers: Following a massive $1.5 billion crypto heist, North Korean launderers routed stolen funds through a service called THORChain. The analysis found a spike of over $900 million in deposits to specific Binance addresses from THORChain during the 10 days the stolen money was being laundered.
- Other Criminal Links: The report found direct connections between major exchanges and notorious criminal groups:
- A money launderer for the Sinaloa drug cartel received over $700,000 at a Binance-hosted address.
- Funds from a notorious ring of Chinese fentanyl traffickers flowed to accounts at OKX.
- A Russian money launderer for North Korea’s weapons program maintained an account at the exchange HTX (formerly Huobi).
