Chainalysis hits back at Binance over illicit crypto analysis that used its data

Core Insights - Chainalysis responded to Binance's analysis claiming that only 0.018% to 0.023% of trading volume on major exchanges is linked to illicit wallets [1][2] - Binance asserts it minimizes exposure to illicit funds despite handling larger trading volumes than competitors [2] - Chainalysis argues that Binance's analysis does not account for all illicit activities, such as ransomware or stolen funds, and only considers direct exposure [3] Company Analysis - Binance's analysis was based on datasets from Chainalysis and TRM Labs, focusing on direct illicit exposure [5] - The exchange aims to demonstrate its commitment to combating crypto crime, especially after admitting to violations that led to a $4.3 billion penalty in 2023 [6] - The former CEO of Binance faced legal consequences for failing to maintain an effective anti-money laundering program, although he received a presidential pardon [7] Industry Context - Wallet hopping is a common tactic among crypto criminals to obscure the origins of illicit funds, which can still be traced by security researchers [4] - Hacks accounted for nearly $2.2 billion in stolen crypto funds last year, highlighting the ongoing challenges in securing the crypto industry [4]