Japanese Exchange Fisco Files Lawsuit Against Binance for Processing $9 Million of Stolen Funds

September 16, 2020 3:19 PM UTC

Japanese based cryptocurrency exchange Fisco has sued Binance, a leading crypto exchange in terms of daily trade volume, for allegedly supporting the laundering of hacked cryptos worth more than $9 million. According to the report, the petition has been filed in the Northern California District Court on September 14. 

In September 2018, the hacker was able to gain access to Zaif, an exchange owned by Fisco in 2019, hot wallet, and swapped almost all the exchange’s funds worth over $63 million at that time. Fisco passed the statement that Binance KYC policy “Lax” facilitates hackers to transfer Zaif stolen assets to other cryptos.

Fisco further stated in its complaint, “The thieves laundered the stolen funds through Binance by taking advantage of Binance’s policy that allowed new users to open accounts and transact on the exchange in amounts below 2 Bitcoin without providing any meaningful identification or KYC information.”

However, clarifying its decision about the filed case in California Fisco said, “a significant portion if not all of the AWS [Amazon Web Services] servers Binance relies on for its operations are located in the State of California.” Also, “Binance has employed, and continues to employ, numerous executives in San Francisco and elsewhere in California.”

Japanese Exchange Demand Damages from Binance

Fisco points out that it has notified Binance several times about the hacked funds in 2018 and requested to freeze suspected funds.  Fisco said, “Binance had actual knowledge that cryptocurrency was stolen from the Zaif exchange and had been transferred to addresses and accounts on Binance’s exchange. Binance either intentionally or negligently failed to interrupt the money laundering process when it could have done so.”

To support its filed petition, Fisco has mentioned the Chainlysis report. In 2019 analytic firm had published a report which said Binance received over 25% of hacked crypto assets worth $2.8 billion.

Fisco is looking for a jury trial over its allegations and requiring damages from Binance for its alleged role in allowing the hacker to withdraw almost $9 million worth of hacked cryptos. 

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