Why Are Founders of Cryptocurrency Exchanges Always Accused of Money Laundering?

Janak9955

Have you heard about the allegations of money laundering involving the founders of cryptocurrency exchanges? That's right, both the founder of FTX, SBF, and the founder of Binance, CZ, have been accused. While the term "money laundering" may sound common, it has a precise definition in the eyes of the law.

According to the Financial Crimes Enforcement Network of the U.S. Department of the Treasury, money laundering is defined as "the process by which criminals attempt to conceal the true source of illegally obtained funds or crime proceeds." The process of money laundering typically involves three steps: first, illicit funds are secretly introduced into the legitimate financial system; then, the funds are transferred multiple times through wire transfers or transfers between multiple accounts, causing confusion; finally, through additional transactions, these funds are integrated into the financial system until the "dirty money" becomes "clean." Why do founders of cryptocurrency exchanges, from SBF to CZ, always seem to be implicated in money laundering? There are several main reasons.

Firstly, cryptocurrency exchanges have experienced rapid growth and widespread adoption, attracting the attention of regulatory and law enforcement agencies. This growth has made these institutions the focus of regulation. Secondly, cryptocurrency exchanges involve large amounts of fund flow, which may come from various sources, including both legal and illegal sources. Due to the anonymity and cross-border nature of cryptocurrency transactions, they are considered to potentially provide a convenient means for money laundering. Recently, the U.S. Department of Justice brought charges against Binance for money laundering, operating as an unregistered money transfer business, and violating sanctions. This event has triggered a massive reaction across the entire cryptocurrency industry, with Binance agreeing to pay a $4.3 billion fine, and Binance's CEO, CZ, resigning and admitting to money laundering charges.

Shri333

It's already becoming routine to see such accusations.