Legal Expert Weighs In on Binance’s Latest Money Laundering Allegations

• Binance faces a fresh suit in a federal court for alleged money laundering.
• The plaintiff claims Binance facilitated the laundering of stolen cryptocurrency funds.
• Attorney Bill Hughes believes the suit aims to benefit from the earlier enforcement actions against Binance.

Binance exchange and its former CEO, Changpeng CZ Zhao, are facing a new lawsuit filed in federal court last Friday in Seattle. The lawsuit accuses Binance of facilitating money laundering that allegedly harmed U.S. consumers.

The plaintiffs, represented by a group of well-known class action lawyers, allege that Binance played a central role in laundering cryptocurrency stolen in various hacks and thefts. 

According to the lawsuit, these stolen funds were funneled through Binance, a process the company allegedly encouraged as part of its lucrative business model. The plaintiffs argue that this constituted illegal racketeering, violating the RICO statute, and claimed they suffered significant financial harm.

Bill Hughes, legal counsel for Consensys, noted that this latest civil lawsuit is anticipated, as attorneys aim to benefit from the legal action taken against Binance by U.S. authorities last year, which resulted in a settlement exceeding $4.3 billion.

Meanwhile, Hughes highlighted that the attorneys leading this case have a history of pursuing high-profile class action lawsuits against major corporations, including Facebook, opioid manufacturers, and Wells Fargo. This pedigree suggests that the case against Binance will be aggressively litigated, with potentially significant financial stakes involved.

A critical aspect of the lawsuit is the claim that Binance’s involvement in the laundering process obstructed the inherent transparency of blockchain technology, which might have otherwise allowed the victims to recover their stolen funds. 

Hughes expressed skepticism about the strength of this particular claim, noting that it might be difficult for the plaintiffs to meet the burden of proof. However, he emphasized that if the case proceeds to discovery and pre-trial motions, it could put the effectiveness of blockchain analytics and on-chain asset recovery on trial.

While still in its early stages, the lawsuit has already garnered attention within the cryptocurrency community. Legal observers speculate that Binance may choose to settle the case to avoid the potential risks associated with prolonged litigation, which could expose sensitive practices within the company and the broader industry.