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Binance Sued for Cashing Out Illicit Hacked Funds Worth More Than $9 Million

Binance has been taken to court by Fisco, a Japanese crypto exchange, for allegedly facilitating the liquidation of at least $9 million after the latter was hacked in 2018. The lawsuit was filed in the Northern California District Court, stating that Binance was the “go-to” location for the hackers in laundering the stolen cryptocurrency because of lenient KYC policies.

Plaintiff seeks payment from losses incurred

In September 2018, Fisco, formerly known as Zaif, found itself in the hands of hackers who made away with crypto in the form of Monacoin, Bitcoin Cash, and Bitcoin valued at $63 million. Zaif was on the receiving end because the cybercriminals drained $22 million from its own assets and $41 million from customer deposits.

Two years down the line, Fisco is suing Malta-based crypto exchange Binance for aiding the cashing out of the stolen funds. As a result, it is seeking compensation for the losses incurred.

As per the complaint:

“After a Japanese cryptocurrency exchange was hacked in 2018, thieves laundered more than $9 million of the stolen cryptocurrency through Binance. Plaintiff Fisco Cryptocurrency Exchange, Inc. now seeks payment from Binance for those losses.”

Lax identification verification

Binance is being accused of not implementing stringent identification verifications as this was a loophole used by the cybercriminals to liquidate the hacked funds. For instance, some basic identifying information like address, date of birth, name, or other identifiers were not needed. Fisco, therefore, wants 1,457 Bitcoin, which was cashed out through Binance returned.

According to the lawsuit:

“During the times relevant to this action, and continuing to date, Binance has facilitated money laundering by allowing deposits and withdrawals of up to 2 bitcoins per day without any form of identification verification.”

Following the acquisition of CoinMarketCap by Binance in April, top executives have been leaving the firm in droves as Carylyne Chan, the interim CEO, was the latest to quit. 

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