$213m spent to combat cryptocurrency fraud in 2023 – Binance

Cryptocurrency exchange Binance has said it invested $213m in its compliance programme in 2023 to tackle fraud and bolster security.

The information was revealed in a statement sent to Sunday PUNCH by Romaana Sutton, the Conversation Architect at JNPR, the public relations agency representing the exchange.

The exchange noted that significant funding allocation underscored its proactive stance in safeguarding its platform and users against fraudulent activities within the cryptocurrency ecosystem.

“Between 2022 and 2023, the amount Binance committed to its compliance programme went up from $158m to $213m, marking a 35 per cent increase.”

The company said it also invested in world-class talent, building or acquiring industry-leading technology, and putting in place efficient policies and processes.

Binance disclosed that it was constantly monitoring transaction flows on and off its platform using a combination of automated and manual approaches.

According to the exchange, in 2023, it improved transaction monitoring capabilities, adding that its on-chain monitoring team processed 677,772 on-chain alerts.

“Thanks to the implementation of a new automation tool, Binance achieved a 150 per cent increase in the productivity of on-chain transaction monitoring, meaning more potential threats were analysed and addressed for the same amount of resources allocated,” it asserted.

It noted that it did not solely analyse blockchain exposure; its enhanced purpose-built tools also monitor for suspicious transactions conducted internally.

It stated, “In 2023, Binance’s analysts reviewed and closed 2,648,318 off-chain alerts. As a result of implementing new tools, both in-house and external, the company increased the productivity of these efforts by an estimated 40 cent compared to last year.”

Cryptocurrency crime reduced in 2023, according to the recently released 2024 Crypto Crime Report by blockchain data firm, Chainalysis.

The total value of digital assets received by illicit addresses also showed a considerable decline between 2022 and 2023, dropping from $39.6bn to $24.2bn.

The share of illicit transactions in the overall crypto transaction volume went down from 0.42 per cent to 0.34 per cent.

“These include assets stolen in crypto hacks as well as funds sent to wallets that Chainalysis analysts designated as illicit,  those associated with ransomware groups, fraud shops, darknet markets, and online drug sellers; addresses linked to terrorism financing and sanctioned entities and jurisdictions, and other relevant categories,” the report stated.

The report attributed the decline to the result of the crypto industry as a whole stepping up its collaborative security efforts, perfecting its defences, and tightening its collaboration with law enforcement agencies.

It was also likely that the average crypto user had also become more vigilant and aware of dangers like scams and fraud, the report added.