Blockchain security firm Chainalysis has challenged a recent analysis by crypto exchange Binance that used its data to claim low exposure to illicit funds. Chainalysis argues the report omitted key categories of criminal activity and focused only on direct transfers. This response comes amid Binance's ongoing efforts to demonstrate strong compliance measures.
On November 17, Binance published a blog post asserting that data from Chainalysis and TRM Labs indicated only 0.018% to 0.023% of trading volume on the top seven crypto exchanges, including Binance, was linked directly to illicit wallets. The post stated: “Both analytics firms’ data suggest that Binance, the world’s largest digital-asset exchange, consistently outperforms the market in minimising exposure to illicit funds – despite handling far greater trading volumes than any other platform.”
Chainalysis responded on November 28 via an X post, noting that the analysis excluded broader illicit categories like ransomware proceeds or hack-stolen funds and considered only direct exposures. It explained: “In other words, if an illicit entity sends funds to a personal wallet, and then that wallet sends funds to Binance, it is not included in this analysis.” Such indirect routing, known as wallet hopping, is a common tactic by criminals to obscure trails, though tracing remains possible for experts.
Chainalysis highlighted hacks as a major illicit source, with nearly $2.2 billion stolen last year. Binance updated its post on November 19 to note it performed the analysis using the firms' datasets and defined direct exposure calculations.
This exchange occurs as Binance seeks to affirm its anti-crime stance. In 2023, it pleaded guilty to anti-money laundering and sanctions violations, paying a $4.3 billion fine. Former CEO Changpeng Zhao resigned, served four months in prison for AML program failures, and received a presidential pardon in October. That month, October 7 attack victims sued Binance for allegedly aiding terrorists, though the exchange maintains compliance with sanctions and cannot comment on litigation.
TRM Labs' Ari Redbord clarified that the 0.018% figure stemmed from a custom June 2025 dataset for Binance, covering limited direct categories only. He said: “The number did not come from a public TRM report — it came from a custom dataset provided directly to Binance. We would defer to Binance on any interpretation, comparisons, or framing around that statistic.”