Coin-Operated Crime: How Binance, OKX and Other Major Exchanges Fuel a Global Laundering Machine

The International Consortium of Investigative Journalists’ (ICIJ) Coin Laundry project has now put numbers and names to what Scam-Or Project has been documenting for years: the largest cryptocurrency exchanges have repeatedly processed funds connected to money launderers, scam operations, drug networks, and North Korean hacking units – even after pleading guilty to violations in the United States. What is marketed as “best-in-class compliance” increasingly resembles a stage show wrapped around a very profitable business model.

Key Findings from the Coin Laundry Investigation

ICIJ analysts examined tens of thousands of blockchain transactions and uncovered a sprawling pattern: well-known trading venues continue to handle flows tied to sanctioned actors and organized crime.

Major Exchanges and Suspicious Flows

According to ICIJ’s reporting (icij.org), the investigation found that:

• Large exchanges such as Binance, OKX, Kraken, HTX, and Coinbase collectively processed billions of dollars associated with criminal networks and sanctioned entities.

• The Huione Group in Cambodia – designated by the U.S. Treasury as a money-laundering concern – transferred at least:

• $408 million in tether (USDT) to Binance, and

• $226 million in tether to OKX,
  in the year after Binance and others had already agreed to U.S. plea deals over anti–money laundering (AML) failures.

• Wallets linked to the Sinaloa cartel, Chinese fentanyl traffickers, and Russian laundering networks acting on behalf of North Korea’s weapons program all used top-tier exchanges as transit hubs for their funds.

• North Korean hacking groups allegedly moved around $1.5 billion stolen from the Bybit platform through THORChain, followed by a $900 million spike in ether deposits hitting a small cluster of Binance addresses.

Weak Oversight and Overloaded Compliance

The investigation also highlights:

• Compliance departments at major exchanges described as overstretched, under-resourced, and struggling to keep pace with the scale and speed of trading.

• A fragmented regulatory framework that still treats systemically important crypto platforms as if they were small “money transmitters,” rather than entities processing trillions in annual volume.

Compliance Analysis: An Ecosystem Problem, Not a Few Bad Wallets

The Coin Laundry revelations are not about isolated rogue accounts; they describe an entire ecosystem that relies on large exchanges as the plumbing for a shadow financial system.

Exchanges as the Pipes of a Shadow Banking Network

Exchanges such as Binance and OKX appear as central conduits in a de facto shadow banking structure, where questionable tether and bitcoin flows are quietly converted into “clean” fiat currency. This continues even after:

• Multi-billion-dollar settlements with U.S. authorities, and

• Appointment of court-approved monitors tasked with strengthening AML controls (Source: Wikipedia).

Regulators may claim victory in press conferences, but the underlying infrastructure remains intact.

The Huione Group Example

The flows connected to Huione Group are especially revealing. This Cambodia-based network, which has been linked to human-trafficking and scam compounds, reportedly:

• Funneled roughly $1 million per day in stablecoins into accounts at exchanges that were supposedly under heightened regulatory scrutiny.

These are not remnants of legacy risk from older accounts. The pattern looks like ongoing commercial activity that is tolerated because it produces substantial fee income – at least until journalists and investigators expose the connections.

Scam-Or Project’s Parallel Findings

Investigations by Scam-Or Project over recent years point to the same systemic vulnerabilities:

• Illegal online casinos

• Unlicensed sportsbooks

• High-risk CFD/FX broker schemes

These operations frequently channel player deposits and victim funds through crypto payment processors and exchanges to fragment and obscure the money trail. The same rails that ICIJ links to:

• scam compounds,

• narcotics organizations, and

• state-sponsored hacking units

are also used to launder proceeds from grey-market gambling and online trading fraud on an industrial scale.

Crypto is no longer just the “getaway car” for darknet markets; it now functions as the cashier desk for the global online gambling and trading grey zone.

Regulatory and Industry Failures

Regulators Behind the Curve

Public authorities do not emerge well from this picture:

• In Europe, new consumer-protection and transparency frameworks arrived late and remain too narrowly tailored to capture the full scope of crypto-based risk.

• In the United States, regulatory action has oscillated between high-profile crackdowns and political reversals, while supervisory agencies lack resources to rigorously oversee exchanges that are still legally treated as money transmitters rather than system-critical financial institutions.

Blockchain Analytics: Watchdogs or Service Providers?

The report also questions the role of blockchain analytics companies. These firms:

• Market themselves as essential watchdogs and compliance partners, yet

• Frequently avoid naming the very large platforms that pay them substantial fees, as noted by ICIJ.

This creates a potential conflict of interest: the entities tasked with shining light on risky flows may be financially reliant on the platforms through which those flows pass.

Call for Information

Scam-Or Project intends to pursue the Coin Laundry story further, with a particular focus on:

• Illegal online gambling operators,

• Offshore brokerage firms, and

• Their associated crypto payment intermediaries.

We invite:

• Insiders at exchanges and payment processors,

• Compliance professionals,

• Former employees, and

• Affected customers and players

to share documents, data, and first-hand accounts.

Your information can help chart – and ultimately dismantle – the crypto money-laundering architecture before the next wave of victims absorbs the financial and personal damage.