Binance Reduces Illegal Cryptocurrency Activity to Historic Lows, Data Shows

The cryptocurrency sector is entering a new stage of maturity, with illegal trading volumes on centralized exchanges declining to historic lows. This is according to a new analysis published by Binance, using independent data from Chainaracy and TRM Labs.

Remarkably, the findings show that illegal activities currently account for only a small portion of global trade volume. This is one of the clearest signs that the industry’s compliance standards and detection systems have strengthened over the past two years.

Illegal activity drops to 0.018-0.023% across major exchanges

Across the seven largest centralized exchanges by trading volume, only 0.018% to 0.023% of total transactions were directly linked to illegal blockchain addresses as of June 2025. This number represents a dramatic improvement from 2023 levels. This is based on close collaboration between exchanges, analytics companies and law enforcement agencies.

The report highlights Binance as the best performing company. According to Chainalysis data, only 0.007% of Binance’s trading volume in 2025 was tied to illegal sources, less than half the average of the next six largest exchanges.

TRM Labs’ data is consistent with that trend, with Binance trading at 0.016% compared to its competitors’ average of 0.023%.

Remarkably, Binance handles a daily processing volume comparable to the amount of activity of the next six largest platforms combined. The report highlighted that keeping the exposure of misconduct so low on such a scale highlights sophisticated monitoring capabilities and disciplined compliance practices.

Related: Binance absorbs 90% of ERC-20 stablecoin deposits, causing ETH to rise on the spot

96-98% reduction from 2023 onwards

Both analysis firms show that Binance reduced illegal exposure by 96% (Chaina Analysis) to 98% (TRM Labs) from January 2023 to June 2025, outpacing the improvement by other major exchanges by 4-5 percentage points.

In 2025 alone, Binance processed over $90 billion in trading volume per day with approximately 217 million trades, while still maintaining an industry-leading margin of safety.

How Binance achieved these results

Binance attributes this improvement to a multi-layered approach that combines people, technology, and collaboration.

• There are more than 1,280 compliance and risk professionals, representing 22% of the company’s global workforce.
• Investing hundreds of millions of dollars annually in KYC, transaction monitoring, and anti-fraud tools
• Processed over 240,000 law enforcement requests and conducted over 400 training sessions for investigators worldwide
• Participation in collective action networks such as the Beacon Network and the T3+ program with Tether, TRON, and TRM Labs
• Enhanced transaction monitoring powered by AI and machine learning models.

Data suggests cryptocurrencies are becoming cleaner than traditional finance

The report also places cryptocurrencies in a broader financial context. Global illicit financing through traditional channels still amounts to trillions of dollars annually.

Meanwhile, fraudulent flows tracked on blockchain across the top seven exchanges remain in the low billions. They are “far below” levels seen in traditional banking, according to a 2025 White House report cited by Binance.

Blockchain transactions are publicly trackable, allowing regulators and investigators to track the flow of value in a way that is not possible with fiat currency systems. Combined with modern compliance frameworks, this transparency pushes the illegal use of cryptocurrencies to a near-negligible level.

Binance claims that this trend signals a transformation in the industry. Cryptocurrency exchanges currently operate under strict standards, setting benchmarks that rival or exceed traditional finance. As adoption increases, data shows that digital assets can be scaled globally without sacrificing user safety.