Unpacking the Decline in Illicit Crypto Use: How Binance Is Driving Industry Progress

New independent data from Chainalysis and TRM Labs shows that illicit crypto activity on centralised exchanges has dropped to historic lows, signalling a new era of maturity for the industry. As of June 2025, the seven largest exchanges recorded just 0.018–0.023% of total activity linked to illicit addresses — a sharp decline from levels seen two years ago.

Binance Leads at Global Scale

Both analytics firms found that Binance, despite processing volumes comparable to the next six exchanges combined, consistently maintains the lowest exposure to illicit funds.

• Chainalysis: Only 0.007% of Binance’s June 2025 volume was linked to illicit activity — 2.5x lower than the average of other top exchanges.
• TRM Labs: Binance recorded 0.016% direct exposure versus 0.023% elsewhere — roughly 30% lower.

This performance reflects deep liquidity paired with robust compliance and monitoring.

What “Direct Exposure” Means

Direct exposure is the percentage of an exchange’s activity that touches wallets involved in verified illicit behaviour (e.g., scams, hacks, sanctions violations). Lower exposure signals effective detection, blocking, and reporting before funds circulate further.

While crypto is often scrutinised, illicit finance in traditional channels far exceeds it — with trillions laundered annually via banks and fiat systems, according to NASDAQ, the UN, and IMF.

Why the Data Differs Slightly

Chainalysis and TRM use different attribution datasets and clustering methods, which naturally creates minor variations. Still, both agree: illicit activity in crypto is now minimal, and Binance leads the industry in reducing exposure.

Binance’s 96–98% Improvement Since 2023

From January 2023 to June 2025, Binance reduced illicit exposure by 96–98%, outperforming industry peers by several percentage points. This is particularly significant given Binance’s 2025 scale — over $90B processed daily and 217 million trades per day.

How Binance Achieves This

• Large compliance investment: 1,280+ specialists (22% of staff) dedicated to risk, compliance, and investigations.
• Law enforcement collaboration: 240,000+ requests handled; 400+ investigator training sessions conducted globally.
• Industry partnerships: Active member of Beacon Network and the T3+ program with Tether, TRON, and TRM Labs to freeze and recover illicit funds in real time.
• Advanced monitoring: AI-powered systems reduce false positives and increase precision in detecting suspicious activity.
   

An Industry Transforming

The data reflects a broader shift: blockchain’s transparency, combined with improved supervision, has made crypto one of the most traceable financial systems. Illicit activity now accounts for only a fraction of a per cent of global crypto transactions — far below levels seen in traditional finance.

Final Thoughts

The alignment between analytics firms reinforces a clear message: crypto is cleaner than ever. Binance’s ability to maintain the lowest illicit-exposure ratios while operating at unparalleled scale underscores strong compliance, advanced technology, and a long-term commitment to user protection.

As adoption grows, sustaining this progress — through collaboration, better tools, and continued transparency — will be essential. Binance’s performance shows that responsible growth and user safety can advance together.

Distributed by APO Group on behalf of Binance.