Chainalysis refutes Binance’s illicit volume report due to omitted data
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Chainalysis pushed back against Binance after the exchange published an analysis that used its data to claim that illicit trading volume across the seven biggest crypto exchanges sat between 0.018% and 0.023%.
In the analysis, Binance had said that numbers from Chainalysis and TRM Labs showed the exchange handled far larger crypto flows while keeping criminal exposure low. According to the material provided, Chainalysis said the analysis did not come from its team and did not include major crime categories tracked across its datasets.
Two days after the post went up, Binance updated the analysis to say it was actually done internally by the exchange itself using Chainalysis and TRM Labs’ raw datasets. The exchange also added details on how it calculated direct links between illicit wallets and trading activity.
Chainalysis is now saying all those figures did not include funds tied to ransomware or hacks, and that the method ignored any movement that went through an intermediate personal wallet before landing on Binance.
Chainalysis challenges Binance’s method and missing categories
Chainalysis released a public message on X saying that it was receiving many inquiries about how its data was used. The firm said, “This analysis was conducted by Binance based on select Chainalysis data. Chainalysis did not conduct the analysis.”
The message also said “the data Binance used for their analysis does not appear to include all categories of illicit activity,” pointing to ransomware and stolen funds as examples.
Chainalysis then said that “the Binance analysis indicates that it is based on direct exposure only,” which means crime-linked funds that passed through a personal wallet were excluded.
The firm did not dispute that its datasets were used. The issue was what parts were chosen and what categories were left out. The clarification arrived at a time when Binance was working to show regulators and the crypto industry that it takes crime risks seriously.
The exchange said it stood by the figures in its blog post and that its update on November 19 gave clearer detail on how exposure was measured.
Binance crime cases, penalties, operations, and crime-control claims
The dispute came in a period where Binance was still dealing with the fallout of its 2023 plea agreement in the United States after it admitted to anti-money laundering failures, unlicensed money transmitting, and sanctions violations, and paid a $4.3 billion penalty.
Founder and former CEO Changpeng “CZ” Zhao stepped down after the plea and later served a four-month prison sentence for failing to keep an effective compliance program. In October, Cryptopolitan reported that CZ received a presidential pardon from Trump.
From January 2023 to June 2025, Binance said it cut exposure to illicit funds by 96% to 98% while processing over $90 billion per day and about 217 million trades daily.
The exchange described a large workforce of compliance and risk staff. It said 1,280 specialists, representing 22% of its employees, work on risk, compliance, and investigations. It said it handled 240,000 requests from law-enforcement agencies and ran 400 training sessions for investigators worldwide.
It also pointed to its work with the Beacon Network and the T3+ program with Tether, TRON, and TRM Labs to identify and freeze illicit funds. The exchange also said it uses AI systems to lower false alerts and improve detection of suspicious flows.
Cryptopolitan noted that Chainalysis did not challenge those internal operational claims in its post.
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Chainalysis refutes Binance’s illicit volume report due to omitted data
Share:
Chainalysis pushed back against Binance after the exchange published an analysis that used its data to claim that illicit trading volume across the seven biggest crypto exchanges sat between 0.018% and 0.023%.
In the analysis, Binance had said that numbers from Chainalysis and TRM Labs showed the exchange handled far larger crypto flows while keeping criminal exposure low. According to the material provided, Chainalysis said the analysis did not come from its team and did not include major crime categories tracked across its datasets.
Two days after the post went up, Binance updated the analysis to say it was actually done internally by the exchange itself using Chainalysis and TRM Labs’ raw datasets. The exchange also added details on how it calculated direct links between illicit wallets and trading activity.
Chainalysis is now saying all those figures did not include funds tied to ransomware or hacks, and that the method ignored any movement that went through an intermediate personal wallet before landing on Binance.
Chainalysis challenges Binance’s method and missing categories
Chainalysis released a public message on X saying that it was receiving many inquiries about how its data was used. The firm said, “This analysis was conducted by Binance based on select Chainalysis data. Chainalysis did not conduct the analysis.”
The message also said “the data Binance used for their analysis does not appear to include all categories of illicit activity,” pointing to ransomware and stolen funds as examples.
Chainalysis then said that “the Binance analysis indicates that it is based on direct exposure only,” which means crime-linked funds that passed through a personal wallet were excluded.
The firm did not dispute that its datasets were used. The issue was what parts were chosen and what categories were left out. The clarification arrived at a time when Binance was working to show regulators and the crypto industry that it takes crime risks seriously.
The exchange said it stood by the figures in its blog post and that its update on November 19 gave clearer detail on how exposure was measured.
Binance crime cases, penalties, operations, and crime-control claims
The dispute came in a period where Binance was still dealing with the fallout of its 2023 plea agreement in the United States after it admitted to anti-money laundering failures, unlicensed money transmitting, and sanctions violations, and paid a $4.3 billion penalty.
Founder and former CEO Changpeng “CZ” Zhao stepped down after the plea and later served a four-month prison sentence for failing to keep an effective compliance program. In October, Cryptopolitan reported that CZ received a presidential pardon from Trump.
From January 2023 to June 2025, Binance said it cut exposure to illicit funds by 96% to 98% while processing over $90 billion per day and about 217 million trades daily.
The exchange described a large workforce of compliance and risk staff. It said 1,280 specialists, representing 22% of its employees, work on risk, compliance, and investigations. It said it handled 240,000 requests from law-enforcement agencies and ran 400 training sessions for investigators worldwide.
It also pointed to its work with the Beacon Network and the T3+ program with Tether, TRON, and TRM Labs to identify and freeze illicit funds. The exchange also said it uses AI systems to lower false alerts and improve detection of suspicious flows.
Cryptopolitan noted that Chainalysis did not challenge those internal operational claims in its post.
Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.
In This News
Share:
In This News
Share:
Read More
Arthur Hayes raises alarm over Tether's big interest-rate bet