Analytics firm slams data released by Binance – here’s what you need to know

Crypto analysis firm Chainalysis disputed Binance’s assessment of illicit crypto flows using its own data, saying the exchange’s analysis omitted important categories and was therefore “incomplete.”

The controversy began when Binance, in a blog post published on November 17, claimed that illegal trading volume on major exchanges was only between 0.018% and 0.023%, citing data from Chainaries and TRM Labs.

In its post, Binance claimed that it looked at the trading volumes of seven major crypto exchanges and found that direct flows from illegal wallets were at extremely low levels, giving Binance the lowest exposure in the industry despite having much higher trading volumes.

However, according to Chainalysis, things are not that simple. The company said in a statement that Binance’s analysis excluded important categories such as ransomware, hacked funds, and indirect transfers through intermediary wallets, and only calculated direct illicit flows. The statement included the following:

“For example, if an illegal wallet first transfers funds to a personal wallet and then to Binance, this will not show up in the analysis.”

Chainalies noted that these “wallet chain” techniques are widely used by criminals, but can often be tracked using the right analytical tools. According to the company’s data, the $2.2 billion in crypto assets stolen through hacking reached $1.7 billion last year alone.

Following the criticism, Binance updated its blog post on November 19 to say that the analysis was created by its own team using datasets from Chainalysis and TRM Labs, and that only direct exposures were considered in the calculation.

Chainalysis’ warning comes as Binance has recently attempted to signal stricter regulatory compliance. In 2023, the company paid a $4.3 billion fine for violating anti-money laundering regulations, conducting fraudulent transfers, and evading sanctions. Its CEO at the time, Zhao Changpeng, was sentenced to four months in prison, but was pardoned by the president in October.

TRM Labs, another analytics firm cited by Binance, also issued a critical statement on the matter. Ari Redboard, the company’s global policy director, said the 0.018% interest rate cited by Binance is a “snapshot” of Binance’s exposure in June 2025, and is limited in scope and covers only direct exposure. Redbord pointed out that this number was not taken from TRM’s publicly available reports, but from a dataset provided only to Binance.

This number is not derived from publicly available TRM reports. This was taken from a dataset provided exclusively to Binance. Binance has full discretion in interpreting and assembling it.

*This is not investment advice.