Red Flags Were Raised. Binance Let Them Fly Anyway

Key Highlights

• Binance allowed 13 flagged accounts to process $144 million after its $4.3B plea deal

• One user changed banking details 647 times in 14 months, raising serious AML red flags

Yello Paradisers! Less than two years after Binance paid $4.3 billion to settle with US authorities over criminal violations, internal documents reviewed by the Financial Times suggest the crypto giant quietly allowed a network of suspicious accounts to process millions. This included around $144 million that flowed through 13 high-risk accounts after the company had pledged to tighten controls.

The files contain Know Your Customer documents, device logs, and IP records tied to users from Venezuela, Brazil, Syria, Niger, and China. Experts say the volume and nature of the activity raise troubling questions about how seriously Binance has implemented the compliance upgrades promised as part of its 2023 plea deal.

Impossible Logins and Suspicious Banking Activity

In one case, a Venezuelan woman’s account moved over $177 million in two years, switching its linked bank details an astonishing 647 times in just 14 months. Another account, registered to a junior bank worker in Caracas, processed $93 million and showed logins from both Venezuela and Japan within 10 hours, an implausible geographic jump that would normally trigger immediate review at a regulated institution.

Investigators also found that all 13 accounts received roughly $29 million in USDT from wallets that were later frozen by Israeli authorities under anti-terrorism laws. These wallets were reportedly linked to Tawfiq Al-Law, a Syrian national accused of laundering money for Hezbollah and Iran-backed militias.

Despite the presence of independent monitors after the settlement, this activity reportedly took place well into 2024 and 2025. Binance’s 2023 plea deal had promised real-time monitoring, enhanced due diligence, and tighter enforcement. What happened instead, according to former prosecutors, resembles the behavior of an unlicensed money transmission operation.

The Trump Pardon and a Cloud Over Compliance

Compounding the controversy is the political backdrop. In October 2025, President Donald Trump issued a pardon to Binance founder Changpeng Zhao. The move reignited scrutiny of Binance’s internal controls, especially given the mounting evidence that the platform continued to allow flagged activity despite its public commitments.

Nick Heather, head of trading at ONE.io, said the findings point to a governance failure rather than a flaw in market structure. “When accounts displaying repeated red flags remain active, that’s not a system glitch. That’s an oversight collapse,” he told the Media.

Hyperliquid Responds to Insider Trading Claims

Meanwhile, another crypto firm was forced to respond to insider trading allegations. Hyperliquid, a decentralized perpetuals exchange, came under pressure after users accused a team-linked wallet of shorting its native HYPE token. In a Discord statement, co-founder Iliensinc clarified that the wallet belonged to a former employee who was terminated in early 2024 and no longer has access to internal information.

The platform emphasized that it enforces strict trading restrictions for employees and contractors, including bans on derivatives trading involving HYPE and rules against sharing non-public material.

Hyperliquid has seen rapid growth and now dominates the decentralized perpetuals exchange market. In Q2 2025 alone, the platform processed over $653 billion in trading volume, making up nearly three quarters of the total market. Even BitMEX co-founder Arthur Hayes called it the “best story” of this cycle.

What Traders Should Know Now

The Binance story is not just about failed compliance. It’s a reminder of how deep the gaps can run beneath public promises. For serious traders and crypto investors, it is a wake-up call about where you put your trust, and how fast institutions can go from regulated to reckless.

This exact issue will be discussed in our MCP YouTube stream. Our analyst will break down the compliance fallout.

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