A cross-border investigation by the ICIJ reveals that major exchanges like Binance and OKX continued to process funds linked to criminal networks even while under government scrutiny.
Despite high-profile regulatory crackdowns and promises of reform, the world’s largest cryptocurrency exchanges have continued to serve as financial conduits for some of the planet’s most dangerous criminal organizations, according to a new investigation by the International Consortium of Investigative Journalists (ICIJ).
The report, titled “Coin Laundry,” analyzed tens of thousands of transactions and found that platforms including Binance and OKX processed hundreds of millions of dollars linked to human traffickers, drug cartels, and North Korean hackers. The findings expose significant gaps in the global anti-money laundering (AML) framework, suggesting that the digital asset industry remains a safe haven for illicit finance even after facing historic penalties.
One of the most glaring examples involves Huione Group, a Cambodian financial firm that the U.S. Treasury Department labeled a “primary money laundering concern” in May. The firm is alleged to launder proceeds from massive “pig butchering” scams and human trafficking operations.
According to the ICIJ analysis, despite Huione’s notoriety, at least $408 million in cryptocurrency—primarily Tether (USDT)—flowed into Binance accounts from the Cambodian group while the exchange was already under the supervision of court-appointed monitors following its 2023 plea deal with the U.S. Department of Justice. Similarly, OKX accounts received over $161 million from Huione after the U.S. Treasury’s designation.
“If the federal government told you that this entity represents a high risk of money laundering or terrorist financing, it would be insane to continue conducting financial transactions with them,” said Ross Delston, an attorney and AML specialist, noting that such designations usually paralyze an entity’s ability to move funds.
The investigation also highlights connections to traditional organized crime. A Binance-hosted wallet address, attributed by U.S. authorities to a money launderer for Mexico’s Sinaloa Cartel, received more than $700,000 from accounts at Coinbase, a U.S.-based exchange. Meanwhile, funds from a Chinese network trafficking fentanyl flowed into OKX accounts.
North Korea’s Lazarus Group, a state-sponsored hacking collective, also utilized these platforms. The investigation tracked transactions from wallets associated with Pyongyang’s weapons program to accounts at HTX, an exchange linked to crypto entrepreneur Justin Sun.
In response to the findings, the exchanges defended their compliance programs. Binance stated it works closely with international law enforcement and that its technology does not allow it to preemptively block deposits, though it investigates suspicious activity. OKX claimed it took “proactive measures” to restrict relevant accounts and cooperated with U.S. authorities.
However, experts argue that the business model of these exchanges creates a conflict of interest. “If they kick the criminals off the platform, they lose a major source of revenue, so they have an incentive to let this activity continue,” said John Griffin, a blockchain data expert at the University of Texas at Austin.
The “Coin Laundry” project, a collaboration involving 37 media outlets across 35 countries, raises urgent questions about the efficacy of current regulations. While the blockchain offers a permanent record of transactions, the sheer volume of illicit flows suggests that without stricter enforcement and genuine compliance from industry giants, cryptocurrency will remain a preferred tool for the criminal underworld.
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