Binance Let Flagged Accounts Move Millions After US Settlement

Questions are now being raised about potential gaps in Binance’s post-plea compliance despite the presence of independent monitors. Separately, decentralized perpetuals exchange Hyperliquid moved to reassure its community after claims that an internal wallet was shorting its HYPE token. The DEX explained that the address belonged to a former employee that was terminated in early 2024.

Binance Compliance Gaps Exposed

Binance allowed hundreds of millions of dollars to flow through accounts flagged for suspicious activity even after agreeing to tighten its compliance framework as part of a $4.3 billion settlement with US authorities. This is according to an investigation by the Financial Times. 

The report referenced internal data that was reviewed by the newspaper, which suggests that serious compliance gaps persisted well after Binance entered a plea agreement with the US Department of Justice in November of 2023.

The leaked files cover transactions spanning from 2021 through 2025 and indicate that multiple high-risk accounts were able to continue trading on the platform despite repeated red flags. In total, the Financial Times examined data linked to 13 suspicious accounts that collectively processed around $1.7 billion in cryptocurrency transactions. Approximately $144 million of that volume reportedly occurred after Binance finalized its settlement with US authorities, a period during which the company publicly committed to strengthening oversight and enforcement.

One of the most striking cases involved an account registered to a resident of a Venezuelan slum that moved roughly $93 million through Binance over four years. According to the investigation, some of those funds originated from a network that was later accused by US authorities of covertly transferring money for Iran and Lebanon’s Hizbollah. 

Another account, registered to a 25-year-old Venezuelan woman, received more than $177 million in crypto over a two-year period and repeatedly altered its linked banking details. The account reportedly changed bank information 647 times in just 14 months, and cycled through almost 500 different bank accounts across multiple countries.

Former US federal prosecutor Stefan Cassella told the Financial Times that the transaction patterns resembled those of an unlicensed money-transmitting business, a serious violation under US financial regulations. The investigation also uncovered examples of activity that appeared physically impossible, like logins from Caracas followed by access from Osaka, Japan, within hours.

Several of the accounts received funds in Tether’s USDT stablecoin from wallets later frozen by Israeli authorities under anti-terrorism laws. Some of those transfers were traced to wallets linked to Tawfiq Al-Law, a Syrian national accused of moving money for Hizbollah and Iran-backed Houthi groups. Israeli authorities seized related accounts in 2023, and the US Treasury sanctioned Al-Law in 2024.

The findings come after renewed scrutiny of the exchange’s governance after US President Donald Trump’s pardon of founder Changpeng Zhao in October for anti-money laundering violations. Despite the appointment of independent compliance monitors in 2024, much of the activity that was pointed out in the report reportedly occurred after monitoring already began.

Hyperliquid Denies Insider HYPE Trading

Another crypto company is also turning heads. Decentralized perpetuals exchange Hyperliquid calmed community concerns after speculation emerged that an internal team wallet was selling and shorting large amounts of its native HYPE token. The clarification came after weeks of discussion in the project’s community after on-chain activity suggested that a wallet tied to early insiders may have been trading against the token.

In a message that was posted on Hyperliquid’s Discord, co-founder Iliensinc said the wallet flagged by users does not belong to an active team member, but rather to a former employee who was terminated in the first quarter of 2024. According to the co-founder, the individual is no longer associated with Hyperliquid Labs, and their trading activity does not represent the values or standards of the company. 

The address in question, identified by users as 0x7ae4…1028, attracted scrutiny after allegedly selling roughly 4,000 HYPE tokens in a single day last November. The transaction was worth about $134,000 at the time.

The issue was initially raised by a community member using the handle cobe.hype, who claimed the wallet was linked to the Hyperliquid team and accused it of shorting HYPE. Those claims fueled concerns about insider behavior, transparency, and whether team members could be trading the token using privileged information. Iliensinc pushed back on those allegations by explaining that Hyperliquid Labs enforces strict internal policies governing token-related activity.

According to the co-founder, all employees and contractors are subject to firm ethical rules that explicitly prohibit derivatives trading involving HYPE, including both long and short positions. He added that trading based on material non-public information is fundamentally forbidden and that the restriction also applies to sharing such information with third parties.

(Source: CoinGecko)

The controversy comes as Hyperliquid dominates the decentralized perpetuals market. The platform has quickly grown into the leading perp DEX by volume. Data from CoinGecko shows Hyperliquid processed roughly $653 billion in trading volume during the second quarter of 2025, accounting for about 73% of the total perp DEX market. Arthur Hayes, co-founder of BitMEX, even described Hyperliquid as the “best story” of the current market cycle.