Is crypto truly awful for money laundering, or is it being unfairly targeted? While some argue that the immutable, public nature of the blockchain makes crypto a poor choice for money laundering because it allows law enforcement to uncover and trace money, the reality is more complex, especially when considering exchanges like Binance.
A Reuters investigation revealed that for five years, the world’s largest cryptocurrency exchange Binance served as a conduit for the laundering of at least $2.35 billion in illicit funds. This raises serious questions about the platform\'s commitment to anti-money laundering (AML) measures. In November 2025, Binance faced a series of regulatory actions and penalties for failing to comply with anti-money laundering (AML) and know-your-customer (KYC) requirements. These penalties highlighted the significant shortcomings in Binance\'s ability to prevent and detect illicit financial activity.
It\'s true that Binance used the statistics to argue that crypto is not the haven for illicit money laundering that pundits claim it to be. In fact, the leading exchange said that crypto is... However, the sheer volume of illicit funds flowing through Binance, as alleged in the Reuters report and confirmed through regulatory actions, undermines this argument. The issue isn\'t necessarily the inherent nature of cryptocurrency itself, but rather the vulnerabilities in the regulatory oversight and compliance procedures of certain exchanges. The Binance case demonstrates that even with blockchain\'s transparency, determined launderers can exploit loopholes and weak controls to move illicit money.
Ultimately, the debate over whether "crypto is awful for money laundering" is nuanced. While blockchain\'s transparency provides some inherent advantages for tracking illicit funds, exchanges like Binance, with their past failings, highlight the urgent need for stricter regulations and robust AML/KYC procedures to prevent crypto from being used as a tool for financial crime. The future of cryptocurrency hinges on addressing these vulnerabilities and ensuring that the technology is not exploited by those seeking to launder money.