Noah Perlman, the Chief Compliance Officer of Binance, the world's largest cryptocurrency exchange, underscored recent statistics from Chainalysis, a blockchain analytics firm. The data reveals a decline in the percentage of crypto transactions associated with illicit activities.
"The crypto ecosystem is becoming safer year on year, and the stats support this," Perlman said. "All crypto transactions linked to illicit activities have dropped from what was already a low 0.42% to 0.34% this year. I'm pleased that Binance's Compliance and Investigations teams are driving forces in the effort to keep crypto safe."
According to the report by Chainalysis, the total value of crypto transactions sent to illicit addresses decreased from $39.6 billion in 2022 to $24.2 billion in 2023. The firm indicated that the percentage of total on-chain crypto transactions tied to illicit activity also decreased from an estimated 0.42% in 2022 to 0.34% in 2023. Stablecoins were used in approximately 60% of illicit transactions, while Bitcoin was used in slightly less than 25%. The remaining illicit transactions involved Ether or altcoins.
The report further revealed that transactions linked to sanctioned entities accounted for most of the illicit activity, representing $14.9 billion or 61.5% worth of illicit transaction volume in 2023. Many of these transactions are associated with crypto services sanctioned by the U.S Department of Treasury’s Office of Foreign Assets Control (OFAC) or operate within sanctioned jurisdictions.
Chainalysis also noted significant decreases in revenues for crimes involving crypto hacking and scamming in 2023; revenues for crypto hacks decreased by 54.3%, while those for scams decreased by 29.2%. However, revenues related to crypto ransomware and darknet markets saw an increase in 2023, following a decrease between 2021 and 2022.
Before joining Binance, Perlman served as the Chief Compliance Officer for the crypto exchange Gemini, as reported on the Gemini website. His prior experience includes a 13-year tenure with Morgan Stanley, where he held the position of Global Head of Financial Crimes. Additionally, Perlman has served as Division Counsel for the United States Drug Enforcement Administration (DEA) New York Division and as an Assistant U.S. Attorney (AUSA) for the Eastern District of New York.
According to a post on Binance's company website, Perlman's team works closely with law enforcement agencies worldwide to combat illegal activity. A consent order from the U.S. Financial Crimes Enforcement Network (FinCEN) stated that "Binance works closely with law enforcement agencies worldwide related to this type of illicit activity, including Hydra, darknet markets, and hacks." The order also acknowledged that Binance has "proactively cooperated with global law enforcement and blockchain vendors to combat terrorism financing."