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

Chainalysis, a blockchain security firm, has publicly responded to inquiries over an analysis conducted by crypto exchange Binance that used its data.

In a November 17 blog post, Binance claimed data from Chainalysis and TRM Labs, another blockchain security firm, showed that only 0.018% to 0.023% of trading volume across the top seven biggest crypto exchanges — including itself — was directly linked to illicit crypto wallets.

“Both analytics firms’ data suggest that Binance, the world’s largest digital-asset exchange, consistently outperforms the market in minimising exposure to illicit funds – despite handling far greater trading volumes than any other platform,” Binance said in the post.

But that may not be the full picture.

According to Chainalysis, Binance’s analysis did not appear to include all categories of illicit activity that Chainalysis tracks, such as funds coming from ransomware or stolen in hacks, and was only based on direct exposure only, Chainalysis said in a November 28 X post.

“In other words, if an illicit entity sends funds to a personal wallet, and then that wallet sends funds to Binance, it is not included in this analysis,” Chainalysis said.

Such wallet hopping strategies are widely used by crypto criminals attempting to cover their tracks, although security researchers can often still trace the movement of funds.

Hacks are one of the largest sources of illicit crypto funds, with criminals stealing nearly $2.2 billion through the method last year, according to Chainalysis.

Binance did not immediately respond to a request for comment.

The exchange said it updated its blog post on November 19 to clarify that it conducted the analysis itself using Chainalysis and TRM Labs’ datasets, and to specify how direct illicit exposure was calculated based on Chainalysis data.

Tough on crypto crime

Chainalysis’ clarification comes as Binance attempts to signal to both regulators and the broader crypto industry that it is tough on crypto crime.

In 2023, Binance admitted it engaged in anti-money laundering, unlicensed money transmitting, and sanctions violations, resulting in a $4.3 billion penalty.

Changpeng Zhao, the firm’s CEO at the time, stepped down and was sentenced to four months in prison for failing to maintain an effective anti-money laundering programme, although he received a presidential pardon in October.

The same month, victims of the October 7 attacks conducted by Hamas accused the exchange of aiding terrorists in a new lawsuit.

Binance has repeatedly said that it cannot comment on any ongoing litigation, and that it complies fully with internationally recognised sanctions laws.

Ari Redbord, global head of policy at TRM Labs, the other firm whose data Binance used in its analysis, told DL News the 0.018% figure cited in Binance’s release reflects a point-in-time analysis that his firm conducted on Binance’s activity for June 2025, and only covers direct exposure for a limited number of categories.

“The number did not come from a public TRM report — it came from a custom dataset provided directly to Binance,” Redbord said. “We would defer to Binance on any interpretation, comparisons, or framing around that statistic.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at [e-mail].