- Fisco on 14th September 2020 has sued Binance, a leading crypto-exchange for laundering
- From the total stolen coins, 1451.7 Bitcoins were laundered through a wallet address belonging to Binance Exchange
- Fisco seems rigid in their demands that are the return of allegedly laundered 1457 BTCs and any additional damages
Japan-based cryptocurrency exchange Fisco on 14th September 2020 has sued Binance, a leading crypto-exchange. As per a 33 pages report filed in the Northern California District, grounds for suing are facilitating and laundering $9 million worth of bitcoins by Binance Exchange. Fisco in their complaint has mentioned that lax policies in the past had made Binance a “go-to” place for committing cybercrimes such as converting purloined cryptocurrency to cash or other coins.
Reasons Stated by Fisco
On 14th September 2018, Zaif, Japan based-crypto exchange was hacked and $63 million were stolen. The stolen assets were a mix of Bitcoins, Bitcoin Cash and Monacoin. From the total stolen coins, 1451.7 Bitcoins were laundered through a wallet address belonging to Binance Exchange. Since Zaif is bought by Fisco, it is they who have filed a complaint. Fisco in their report further mentioned that Binance’s loose Know Your Customer (KYC) policy was the main reason for criminals to pick this exchange.
Fisco even alleged that in 2019 when $2.9 billion were illicitly transferred between various crypto exchanges, Binance was the one to receive 27.5% (the largest share) of those illicit transactions. They even pointed out that Binance’s policy of allowing to transfer up to 2 BTC on their platform without being asked to provide any information is the main cause.
Demands Put Up by Fisco
Fisco in their very detailed report mentions that at the time of the crime, Zaif had contacted Binance multiple times about the splitting of funds by hackers. But Binance decided either intentionally or negligently to ignore Zaif employees. They believed if Binance would have taken exchange at the time laundering of the money could have been stopped. And now, Fisco is demanding compensation of $9 million worth of bitcoins laundered through the exchange. Fisco is of the opinion that this is a fair compensation against the time and money already been spent by Zaif and Fisco in this pursuit.
Case Currently in California Court
Fisco says they have filed the case in the court of California as the majority of the users who lost their bitcoins belonged to California. Secondly, this city is the operational base for major activities in Binance. And the Amazon Web Servers (AWS) on which Binance relies are also based in California. Although it’s a fact that Binance holds servers in California, their website serves users from the servers closest to their locations.
It is still unknown whether these arguments and allegations by Fisco will hold in the court or not. But Fisco seems rigid in their demands that are the return of allegedly laundered 1457 BTCs, and any additional damages that Zaif bore along with the legal expenses that they will bear.
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