Binance processed $346M in bitcoin for seized crypto exchange Bitzlato - report

Top cryptocurrency exchange Binance is said to have processed ~$346M in bitcoin ( BTC-USD ) for trading platform Bitzlato, whose founder Anatoly Legkodymov was charged with money laundering and ransomware. Bitzlato allegedly processed over $700M of illicit funds, including ~$15M in ransomware proceeds. The U.S. Justice Department said Bitzlato touted the laxity of its background checks on clients, Reuters reported . Binance was listed as one of the top three receiving and sending counterparties in an order against Bitzlato. A spokesperson told Reuters that Binance provided "substantial assistance" to international law enforcement to support their Bitzlato probe. B-Token Disparity In other news, Binance admitted that it mistakenly kept collateral for some digital assets it issues in the same wallet as funds belonging to customers of its platform. Binance issues its own versions of third-party tokens to make them usable on other blockchains as cryptos are only compatible with the blockchain they were built on. It issued 94 Binance Bridge pegged tokens (B-Tokens), Bloomberg reported , and reserves for close to half of these are stored in a cold wallet called Binance 8. Binance 8 is said to contain more assets than required for the number of B-Tokens issued. This indicates that the collateral has been mixed with user assets as the tokens are supposed to be backed 1:1. "Binance is aware of this mistake and is in the process of transferring these assets to dedicated collateral wallets," a company spokesperson told Bloomberg, adding that tokens held with Binance "continue to be backed 1:1". The issue comes at a time when the safety of user funds in exchanges is being called into question. If an exchange is facing a liquidity crunch or an increase in redemption requests, users may not be able to access their funds if they are kept in the same wallet as collateral. Binance did not immediately respond to requests for comments. Earlier, crypto companies face roadblocks in getting SEC approval to go public .