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Binance fired employees who found $1.7B in crypto was sent to Iran

551 points| boplicity | 6 days ago |nytimes.com

263 comments

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lacoolj|6 days ago

Contrary to a lot of comments here, the only way to use bitcoin (or any cryptocurrency) without tracking is to mine it yourself, and even then...

Where did you get it? Purchased/transferred? Where did they get it? What else did the person with that wallet do?

If the answer is "mined", even then, you have to actually do something with it, right? Buy something? Where is that something shipped? At worst you'll have to pay customs on it, and have it actually get through customs. At best, your address is in a database now.

Have it shipped somewhere obscure? Video cameras are everywhere. Have it shipped to someone else's house and steal it off their porch? Again, cameras everywhere.

Not have a physical item? Just a service? That's pretty much the closest you'll get to anonymous money transfer and full usage (along with whatever VPN you prefer).

Cool that was a fun mental exercise. Now everyone tell me why I'm wrong!

wildzzz|6 days ago

It's great for transactions where moving a large amount of money would be impossible due to KYC laws and smuggling the cash even more so. As long as you can find someone willing to sell you bitcoin and someone else willing to accept it, you're still in business.

bulbar|6 days ago

> Where did you get it? Purchased/transferred? Where did they get it?

NFTs solved that problem by providing plausible cause of "I got the money from selling this money image for 100,000 USD"

Haven880|2 days ago

Originally there is mixer parties. That was taken down massively in the covid years. That is the one that can trackless. Currently the only one that near impossible to track is Monero. But that is actively suppress worldwide. You rarely heard it and any YTber promoting it, usually algo suppressed. Now crypto are even more trackable than bank transfer. I guess cash and maybe diamonds is still king.

para_parolu|6 days ago

It shipped to a forest, buried and gps location is given. Pretty old scheme when buyer and seller don’t want to meet

VirusNewbie|6 days ago

I mean, I can meet you in an ally, transfer some satoshis from my wallet to yours, you hand me a wad of cash/jewels/MtG/collector funkos and you might not even know my name.

omegadynamics|6 days ago

fund my art project and my sculpture will prove you wrong.

joe_the_user|6 days ago

Yeah, crypto as normally managed is one of the most traceable currencies. The block chain is in fact a complete log of transactions. Naturally that means there are no untraceable uses despite your sound-of-one-hand-clapping thought experiment.

afroboy|6 days ago

Binance is not an American company and sending money to Iran or Palestine or Hamas is something should not be up to Americans to decide, i personally will not accept Americans be the police of the world they did so much horrible things and terrorising Muslims for so many years.

I hope for the day the world will be decoupled from dollar as universal currency. That day countries will free to trade with each other without worrying about some orange head with low IQ.

disgruntledphd2|6 days ago

> Binance is not an American company and sending money to Iran or Palestine or Hamas is something should not be up to Americans to decide, i personally will not accept Americans be the police of the world they did so much horrible things and terrorising Muslims for so many years.

Doesn't matter, tbh. Regardless of the philosophical viewpoint here (which I do agree with), AML and Bank Secrecy type laws exist basically everywhere, and are no joke. They're one of the few things that bank executives go to prison for.

And like, Binance were just convicted of this a few years back. I wouldn't be surprised if the US government tried to shut them down at this point. And if Binance are persona non grata to the US government then they're out of the dollar system which basically cuts them off from almost the entire banking system.

zeroCalories|6 days ago

If the U.S decides to not work with, or allow its citizens to work with a company, that should be up to them.

paxys|6 days ago

Isn't this like the #1 use case for crypto?

Everyone wants an untrackable unblockable currency that is out of government control until the day it is used for things they don't like, then suddenly "government please control this!"

chihuahua|6 days ago

I thought the #1 use case for crypto was ransomware, followed by shitcoin rug-pulls, and the ability to commit theft without recourse.

Sending money to Iran is just a minor edge case.

cs702|6 days ago

It's also the #1 use case for $100 US dollar bills. Most US $100 bills, in fact, are not even in the US.[a][b]

US $100 bills are the currency of choice for small-time crooks and evildoers around the world.

They are also the currency of choice for big-time crooks and evildoers. Briefcases of US $100 bills have long been used for illicit payments, as depicted in numerous books and movies.

Just because crooks and evildoers use US $100 bills doesn't mean they are not useful and valuable to honest people too.

What Binance did was wrong, no doubt, but Binance ≠ crypto.

--

[a] https://www.stlouisfed.org/on-the-economy/2022/oct/innocent-...

[b] https://www.npr.org/sections/money/2013/04/12/177051690/most...

garrettgarcia|6 days ago

It's clearly not untrackable. It's never been untrackable. That's how they know it went to Iran.

ericbuildsio|6 days ago

Could someone explain to me where the myth of "crypto = untrackable" comes from, and why it's still being perpetuated?

Storing a record of every single transaction on a publicly accessible blockchain sounds trackable by design

carshodev|6 days ago

Unblockable yes, untrackable no. Also portable is the main ability of crypto.

The reason that this could be found out is because every transaction is recorded so it can be linked back through the chain once it hits another exchange that is KYC'd.

If I have a gold watch and I wear it through the airport go to turkey melt it down and give it to an iranian, then buy a fake watch and return home noone will every know that this transaction took place.

This would be 100% impossible to track in any reasonable manner. If I went to an exchange transfered bitcoin to a person then they spent this bitcoin in a way that linked it to their identity this would provide a full audit trail that would link me to that person. Also this audit trail could NEVER be removed or altered.

There are ways to use bitcoin in an untracable manner just like gold, you can have a cold wallet and transfer the keys to someone else. The cold wallet password could be only memorized and thus have no physical trace and no transaction record could take place whatsoever, but this is the OPPOSITE of what an exchange does.

Also cash and bank systems are not as resistant, they can fail, be hacked, be altered, people can use shell companies and fake identities.

Some cryptos like monero try and hide the transaction path but even this crypto has some vulnerabilities making linking it to people possible in some cases.

bigstrat2003|6 days ago

The #1 use case for crypto is that it's anonymous like cash. And yes, this enables people to use it for crime... just like they use cash. The unavoidable cost of freedom has always been that some people will misuse it. Personally, I would rather have freedom even if it gets misused than not have freedom even if it means crime is over.

wat10000|6 days ago

It seems to me that the people who want the unblockable currency out of government control are not the same people who want to block money transfers to countries like Iran.

moralestapia|6 days ago

What's funny is that Bitcoin/Ethereum are now the most tracked ledgers on the planet. If I wanted to do some shady value exchange it would be my last choice.

expedition32|6 days ago

Money laundering is only good when our people are doing it.

slopinthebag|6 days ago

Yes it's the #1 use case, in the same sense that the #1 use case of a free and open internet is criminal activity.

jacobjjacob|6 days ago

It’s 100% trackable. It’s anonymous but there are many datapoints that could be used to deanonymize if the transaction parties are not extremely careful

mvdtnz|6 days ago

Certainly in the top 5 along with child pornography, illegal gambling, drug pedalling and ransomware.

torginus|6 days ago

Can't anyone basically sanction entire wallets, and mark them, and make some legislation that any transaction involving coins originating from those wallets be rejected by all payment processors and exchanges in regulated markets?

I mean, they obviously can, but probably they have elected not to do so. But if crypto becomes a tool in the hands of enemy nation states, such regulation can't be soo far off.

Though that would create a secondary market for these 'tainted' coins, and would probably have far-reaching consequences into the crypto ecosystem.

fredgrott|6 days ago

you mean its not used for the Paul brothers latest meme coin rug pulls?

bko|6 days ago

> Everyone wants an untrackable unblockable currency

What are you talking about? Crypto is defined by its trackability (immutable, permission-less, verifiable ledger of every transaction in history). Please refrain from commenting on things you're unfamiliar with.

wnevets|6 days ago

> Isn't this like the #1 use case for crypto?

What is even the point of crypto if you can't commit crimes with it?

dpedu|6 days ago

Not just the #1 use case, the only use case. Real money is better in every scenario other than crime.

EA-3167|6 days ago

I'd argue the #1 use case is ransomware and scamming, but this has to be a close second. Honestly the journey from "The blockchain is the future, everyone must see that" to where we are now really feels like the one we're taking with 'AI'.

In the end it will still exist, but the use case is going to be so much less inspiring than people want to believe, outside of medical and fundamental research at least.

jstummbillig|6 days ago

If one of two options can't be regulated or tracked, that is the option that will predominantly be used by actors who have outsized interest in being regulation or being tracked.

BenGosub|6 days ago

Is Iran supposed supposed to be banned on Binance?

carshodev|6 days ago

Every US company/citizen is not allowed to do trade with Iran due to the ITSR laws except under highly specific situations.

It gets more complex if a company is multinational though.

A citizen can travel to Iran but even if they buy something there on holiday if they bring it back to the US they need to go through complex customs procedures to make sure its legally brought back in.

arjie|6 days ago

It's a US-sanctioned country so allied nations play along with the sanctions and Binance is located within that US sphere of influence so Iran is supposed to be currently banned, yes.

stevofolife|6 days ago

The article title doesn't say "Fired". The HN title is kind of misleading.

resoluteteeth|6 days ago

It not the original title but I'm not sure it's "misleading"

> Within weeks, Binance fired or suspended at least four employees involved in the investigation, according to the documents and three people with knowledge of the situation. The company cited issues such as “violations of company protocol” related to the handling of client data.

liamconnell|6 days ago

I think NYT uses multiple titles for some articles. I had copy pasted it

aswegs8|6 days ago

>Within weeks, Binance fired or suspended at least four employees involved in the investigation, according to the documents and three people with knowledge of the situation. The company cited issues such as “violations of company protocol” related to the handling of client data.

LunaSea|6 days ago

Remember that the CEO of Binance was pardoned by Trump after pleading guilty to financial fraud.

paxys|6 days ago

It's more than just that.

> President Trump granted a pardon to Binance’s founder, Changpeng Zhao, who had spent four months in federal prison in 2024 for his role in the firm’s crimes. The Trump family’s crypto start-up, World Liberty Financial, has forged close business ties with Binance, and Mr. Zhao was a guest this month at a conference at Mar-a-Lago, Mr. Trump’s club in Palm Beach, Fla.

michaelteter|6 days ago

Iran obviously missed the memo. All they have to do is setup a wealth fund and invest heavily in a Trump venture; then they can become a most favored nation and forego all this conflict.

seydor|6 days ago

Binance should be considered a US instrument now.

ourmandave|6 days ago

I wonder if the pardon bribe is less if your crime is something near and dear to the Orange King's heart.

outside1234|6 days ago

Probably a bribe from Trump to Iran