The Japanese Fisco exchange sued Binance for allegedly helping hackers during the $63 million hacks in 2018. Binance allegedly helped hackers launder the stolen funds from the Zaif hacked crypto exchange as we reported in the Binance news.
The Japanese Fisco exchange sued and accused Binance of continuing its lax policies today similarly as they did in 2018. The hackers stole crypto assets worth $63 million in Bitcoin, Monacoin, and Bitcoin Cash from the Japanese crypto exchanges Zaif. The plaintiff argued that Binance is responsible for helping the hackers to launder the $9.4 million in stolen funds. Seven counts were lanced at Binance in the United States District Court of California concerning the hack in 2018.
Fisco, the exchange that took over Zaif’s business after the hack and reimbursed the customers, is the main complaint in the case. Due to the transparent ledger of Bitcoin, it was not hard to trace the movement of the stolen funds. Soon after the hack, analytics firms and Zaif employees traced a huge portion of the hack back to the address which belonged to Binance.
Fisco claims that Zaif informed Binance of the hacker BTC inflows which gave the latter more time and opportunity to freeze the accounts. Binance’s failure to cooperate with Zaif allowed the hackers to process 1,451.17 BTC which were worth $9.4 million at that time through smaller accounts on the exchange. The plaintiff and the hacked Zaif exchange are based out of Japan while Binance is registered in Malta and has multiple offices across the world including California.
Fisco brought the case to California and said that it is home to the principal operations of Binance and to many of the victims of the Zaif hack. Fisco seeks damages from Binance for the routed funds through the exchange along with the fair compensation and the details of which will be discussed in a trial. The two BTC withdrawal limit allows non-KYC users to withdraw more than $20,000 at current prices. The withdrawal limit for starter users on Kraken is $5000. The case filing also noted that in 2019, the exchange facilitated the laundering of more than $750 million from illicit activities.
The amount of damages is small for binance which crossed $1 billion in cumulative profits within the first three years of the launch. But the questions raised are quite troubling for the crypto users.
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