Binance's Compliance Changes Hinder Crypto Crime Investigations, Report Finds

Modifications in Binance's compliance protocols are making it more challenging for law enforcement to access crucial user data.

According to a report by The New York Times, Binance's updated compliance policy has complicated the process for international law enforcement agencies seeking user information, particularly affecting investigations into fraud and money laundering.

Since April 2025, Binance has shifted its cooperation methods, requiring most foreign inquiries to go through the United Arab Emirates government and Mutual Legal Assistance Treaties (MLATs). This change has resulted in significant delays for investigators in Europe and the U.S., who have voiced concerns over the hindrance to tracking criminal activities. However, Binance maintains that it remains responsive in urgent cases involving child exploitation and terrorism.

At a law enforcement conference in June, officials from five European countries expressed frustration over the difficulties in obtaining data from Binance. The exchange's new policy contrasts sharply with its previous practice of direct engagement with authorities, which allowed for quicker responses in suspicious cases.

Alona Katz, an assistant district attorney in Brooklyn, emphasized the importance of timely access to records, stating, "How quickly you receive your records can affect the outcome of your case." Under the revised policy, law enforcement must use MLATs, which can prolong the evidence exchange process compared to direct communication with Binance.

A Binance spokesperson countered that the platform has not reduced its cooperation with law enforcement and has actually increased its support over the years, claiming these changes are part of enhancing safeguards and aligning with regulatory standards. Despite the criticism, Binance insists that it prioritizes partnerships with authorities globally.

These developments come amid growing scrutiny of Binance's compliance practices, including recent reports that the exchange terminated compliance staff investigating transactions linked to Iran—a claim Binance has denied, labeling the reports as inaccurate.