Binance under scrutiny, increased enforcement amid growing scams, Pepe’s drama

Binance under scrutiny, increased enforcement amid growing scams, Pepe’s drama

This week, Binance takes the spotlight amid allegations of market manipulation and sanction violations. Meanwhile, regulators ramp up enforcement actions against a backdrop of crypto-related crimes — the latest involving Pepe Coin.

Binance’s SEPA concerns

Binance emerged as a focal point of attention this week, owing to a sequence of circumstances. 

The official Twitter support of the exchange alluded to a momentary cessation in EUR transfers, indicating the temporary suspension of SEPA transfers, without specifying a definite timeline for reinstatement.

Despite the lack of explicit reasons, Binance’s efforts to keep users informed maintain an air of anticipation about whether external factors might be at play.

Following reports of the concerns related to SEPA transfers, the company promptly addressed the situation through an official statement provided to

According to a Binance representative, the SEPA deposit and withdrawal services will be available until Sep. 25. Yet, individuals will encounter an increased emphasis on regulatory conformity.

As part of a proactive approach to conducting regular assessments, certain users may need to provide additional personal details.

Mounting allegations 

Shortly after this, Binance came under scrutiny as allegations of market manipulation gained limelight. On Aug. 23, Santiment disclosed that discussions in the crypto space have centered around Binance and its native token, BNB. 

According to the market intelligence platform, Binance has surged to the forefront of trending topics, securing the first position, while BNB follows closely in third place. 

Santiment attributed the surge in social mentions to growing claims of Binance’s potential involvement in market manipulation. Allegations speculate that CEO Changpeng Zhao might be strategically selling off Bitcoin (BTC) to uphold the value of BNB.

Binance also came under fire for allegations of sanctions violations. Per an Aug. 22 report, the Wall Street Journal reported that the exchange allegedly engaged with sanctioned entities in Russia. 

Despite claims of compliance, the WSJ report claims that Binance’s Russian operations remain active. There are suspicions of ruble-based crypto trades, potentially tied to sanctioned Russian banks. 

The exchange is also suspected of involvement in peer-to-peer ruble transactions. While Binance refutes the accusations, emphasizing adherence to legal norms, these allegations gained momentum, triggering concerns.

Binance took action regarding its peer-to-peer (P2P) service after the claims emerged that it enabled transactions with blacklisted Russian financial institutions. 

In response to the reports, Binance stopped endorsing five sanctioned Russian banks for ruble transactions. Notably, cardholders from banks like Rosbank, and Tinkoff Bank could previously buy crypto through Binance. 

Binance ends card services in LatAm and Middle East

Binance revealed this week that it had halted its crypto debit card services in the regions of Latin America and the Middle East, effective from Aug. 25. 

The company made this decision in reply to a Colombian customer’s query, noting that the decision impacts a small percentage of users within the region. 

Users affected by this suspension will still be able to utilize their crypto debit cards until Sep. 21, 2023, ensuring a smooth transition. 

The company is actively suggesting Binance Pay as a secure and convenient alternative for crypto payment needs during this time.

Binance, Mastercard terminate partnership

Reports from Aug. 24 confirmed the termination of the partnership between Binance and Mastercard. This collaboration facilitated the issuance of crypto cards to Binance customers in various nations, including Bahrain, Argentina, Colombia, and Brazil.

The partnership is expected to end on Sep. 22. It’s noteworthy that this termination does not have any impact on Mastercard’s concurrent crypto card ventures with other crypto firms.

While Mastercard did not publicly disclose the reasons behind the termination, the company emphasized its unwavering commitment to rigorous assessments and continual surveillance across all engagements involving cryptocurrency.

Increased enforcement actions

This week also saw a slew of enforcement actions surrounding crypto-related crimes. Anthony Faulk, a 26-year-old U.S. national held accountable for a substantial crypto heist, received a prison sentence spanning three years.

The individual utilized the SIM-swap method to execute the heist, resulting in the theft of crypto assets worth $20 million. This tactic involved manipulating customer service representatives of SIM card providers in order to illicitly gain control over the targeted victims’ phone numbers.

Reports from Aug. 23 revealed that Nathanial ‘Nate’ Chastain, a former executive at OpenSea, is also facing jail time due to NFT insider trading. 

Convicted of fraud and money laundering, Chastain will serve a three-month prison term, followed by house confinement. Additionally, he must undergo three years of supervised release, pay a $50,000 fine, and forfeit the illicit gains.

James Charles Rivera, a 32-year-old resident of New York, was sentenced to an astonishing 96 years behind federal bars, per a DoJ press release this week. Rivera operated as a vendor of steroids on a concealed online marketplace, where he used crypto for transactions.

The press release disclosed that Rivera, together with his associates, had been involved in the distribution of anabolic steroids. With a trail of thousands of sales, Rivera raked in millions of dollars in virtual currency and cash.

Upon pleading guilty to the crime six months ago, he confessed to processing numerous orders and accumulating a haul of nearly 451 Bitcoin (BTC).

This week, China saw its fair share of enforcement. A Chinese court handed down a life sentence to Xiao Yi, a former official within the Chinese party, after finding him guilty of power abuse and bribery.

Xiao Yi’s conviction stems from his misuse of authority, as he exploited his position to foster the expansion of Bitcoin mining operations by arranging financial backing and power supply provisions. He carried this out despite China’s ban on crypto mining.

Tornado Cash devs face charges

The developers of Tornado Cash, a crypto-mixing service, found themselves ensnared in the recent wave of enforcement actions.

Roman Storm and Roman Semenov, the creators of Tornado Cash, are now facing charges related to money laundering, carrying a potential maximum prison term of 20 years.

An Aug. 23 press release confirmed their indictment for allegedly facilitating transactions worth hundreds of millions of dollars for North Korea’s Lazarus Group.

Both Storm and Semenov are accused of a single count each of conspiring to engage in money laundering and plans to violate the International Economic Emergency Powers Act. 

Storm was arrested in Washington state while Semenov remains at large. Another co-founder, Alexey Pertsev, whose involvement with Tornado Cash is unrelated to these legal matters, will also face trial in Amsterdam.

Shortly after the initial report, Storm’s attorney Brian Klein confirmed that the developer had received bail. Klein, in a statement on X (formerly Twitter), expressed dissatisfaction with his client’s implication for software development.

Escalating scams

This slew of enforcement actions coincided with a massive wave of scams and claims of scams within the crypto scene this week., a fast-growing decentralized social platform, was a target this week, as its popularity caught the attention of cybercriminals.

Reports from Aug. 21 called attention to a phishing scam with individuals impersonating on X. On-chain surveillance system AegisWeb3 issued the warning, advising users to remain vigilant.

AegisWeb3’s alert highlighted the emergence of a sham account with the handle @friendtech_web3. This account had purportedly initiated an airdrop scheme for the Friend token, luring users to a deceitful website.

Moreover, the founder of DeFi Llama revealed this week that cybercriminals have unleashed a fresh wave of crypto scams, leveraging Google Ads as a deceptive gateway. 

In this evolving scheme, fraudsters purchase ad space on legitimate crypto websites via Google, then employ URL injection tactics to slyly reroute users to malicious phishing platforms once they interact with the ad.

Pepe team accused of insider trading

The Pepe Coin took center stage this week, as it got embroiled in a mounting controversy involving a substantial token heist and allegations of insider trading.

On-chain analyst Yazan alleged on Aug. 26 that individuals with insider access have initiated a sell-off of their PEPE holdings. This move has seen nearly 400 billion PEPE tokens sold primarily from a single address.

Yazan urged major cryptocurrency exchanges such as Binance and OKEx to take swift action against the alleged insider trading activities.

The controversy erupted following a tweet by the official Pepe account, revealing the unauthorized transfer of 16 trillion Pepe tokens valued at $15 million to crypto exchanges.

Another individual, Jeremy “Pauly” Cahen, who was once associated with Pepe Coin’s marketing, further accused the meme coin’s insiders of engaging in insider trading after a massive disappearance of 16 trillion PEPE.

Cahen’s disclosure on Aug. 26 outlined that the Pepe Coin team holds a significant stock of $16 million to $17 million worth of PEPE across nine distinct wallets. 

Interestingly, instead of an all-out sale, the individuals have strategically assumed a considerable short position by gradually offloading PEPE tokens from a controlled exchange (CEX) wallet.

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