KEY TAKEAWAYS
- Illicit activity in the cryptocurrency sector has significantly declined from early 2023 to mid-2025, according to Chainalysis and TRM Labs.
- Binance’s exposure to illicit funds is notably lower than industry averages, having decreased by 96-98% since early 2023.
- Binance’s success is attributed to its robust security and compliance framework, including a large team dedicated to compliance and risk management.
- The crypto industry’s shift towards transparency and security is evident, with illicit exposure now in the single-digit billions compared to traditional financial systems.
Recent data from blockchain analytics firms Chainalysis and TRM Labs reveal a significant decline in illicit activity within the cryptocurrency sector between early 2023 and mid-2025. The findings show that direct exposure to illicit funds on the top seven centralized exchanges now accounts for only a few hundredths of one percent of total transaction volume.
Both firms highlight Binance’s performance, noting that its exposure to illicit funds is markedly lower than industry averages, having dropped by 96-98% since early 2023. This achievement is particularly notable given Binance’s trading volumes, which are comparable to the combined volumes of the next six largest exchanges.
How Binance Achieves Low Illicit Exposure
Binance’s ability to maintain low exposure to illicit funds is attributed to its comprehensive security and compliance framework. The exchange employs over 1,280 specialists in compliance, investigations, and risk functions, representing nearly 22% of its global workforce. Additionally, Binance invests heavily in Know Your Customer (KYC) processes, transaction monitoring, and financial crime investigations.
The company collaborates extensively with law enforcement, having responded to over 240,000 requests and conducted more than 400 training sessions for investigators worldwide. These efforts are part of Binance’s broader strategy to enhance user protection and ensure compliance with global standards.
Industry-Wide Improvements in Crypto Security
The decline in illicit activity is indicative of a broader trend within the cryptocurrency industry towards greater transparency and security. Blockchain’s open ledger allows for unprecedented tracking of transactions, enabling exchanges and regulators to monitor and mitigate illicit activities effectively.
According to Chainalysis and TRM Labs, the combined yearly illicit exposure across the top seven centralized crypto exchanges is now in the single-digit billions, a stark contrast to the trillions of dollars laundered annually through traditional financial systems. This shift underscores the maturation of the crypto industry and its potential to rival traditional markets in terms of security and compliance.
For further details, the full report can be accessed here.
Why This Matters: Impact, Industry Trends & Expert Insights
Recent data indicates a significant decline in illicit activity within the cryptocurrency sector, highlighting Binance’s leadership in compliance. This decline is attributed to Binance’s comprehensive security and compliance framework.
A recent report highlights that crypto exchange compliance trends are defined by stricter global regulatory oversight and the adoption of advanced monitoring technologies. This aligns with Binance’s proactive compliance measures, which have resulted in a substantial reduction in illicit fund exposure.
As per insights from a Coin Bureau analysis, Binance has evolved into a compliance-driven innovator, integrating robust KYC/AML protocols and real-time transaction monitoring. This supports the exchange’s ability to maintain low exposure to illicit funds, reinforcing its position as a leader in industry compliance.
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