The crypto industry is entering a new era of maturity, with independent data from leading blockchain analytics firms Chainalysis and TRM Labs showing a significant decline in illicit activity on centralised exchanges. Once a prominent concern for regulators and users, illicit transaction volumes now represent only a shrinking fraction of global digital-asset activity as exchanges, analytics providers, and law-enforcement agencies continue to strengthen industry safeguards.
As of June 2025, the seven largest centralised exchanges by volume recorded just 0.018–0.023% of total transaction activity linked to illicit addresses – a historic improvement compared with levels observed two years prior and a clear signal of rising compliance standards across the sector. Binance has played a central role in this progress, achieving the largest reduction in illicit transaction share while maintaining the industry’s deepest liquidity pool.
Binance: The Strongest Performer at the Largest Scale
Both analytics firms found that Binance, the world’s largest digital-asset exchange, consistently outperforms the market in minimizing exposure to illicit funds – despite handling far greater trading volumes than any other platform.
Chainalysis reported that in June 2025, only 0.007% of Binance’s transaction volume was directly linked to wallets associated with illicit activity. The next six centralised exchanges’ average stood at 0.018%, meaning Binance’s ratio was more than 2.5 times lower.
TRM Labs’ independent assessment reached a similar conclusion: 0.016% of Binance volume had direct exposure to illicit sources, compared with 0.023% for other leading exchanges, a gap of roughly 30%.
These findings come with important context: Binance’s trading activity is comparable to the combined volume of the next six largest global exchanges. Maintaining the industry’s lowest illicit-exposure ratio at this scale demonstrates not only technological sophistication but also operational discipline in compliance and monitoring.
What “Direct Exposure” Means
Direct exposure represents the share of an exchange’s total transaction volume that can be traced directly to wallets involved in verified illicit activity, such as ransomware operations, scams, sanctions violations, or hacks. Blockchain transparency makes it possible to quantify this precisely.
For example, if 1 USD out of every 10,000 processed by an exchange originated from or moved to an illicit address, that would represent a 0.01% direct exposure rate. Lower exposure means the platform’s systems are effectively identifying, blocking, and reporting suspicious activity before it circulates further into the ecosystem.
While headlines often fixate on crypto, the scale of illicit finance in traditional channels dwarfs it: NASDAQ’s 2024 Global Financial Crime Report estimates $3.1 trillion in illicit funds flowed through the global financial system in 2023, and UN/IMF analyses suggest 2-5% of global GDP, or over $2 trillion at today’s levels, is laundered each year via traditional finance. By contrast, Chainalysis and TRM put combined yearly illicit exposure across the top seven centralised crypto exchanges in the single-digit billions.
As a 2025 White House report on Strengthening American Leadership in Digital Financial Technology states, “The prevalence of money laundering and terrorist financing via digital assets remains well below that of the same activities utilizing fiat currency, bank and traditional money services fund transfers, and other methods that do not involve digital assets.”
Why Different Analytics Firms Show Slight Variation
Small differences between datasets are natural. Each analytics company maintains its own proprietary clustering algorithms, off-chain intelligence, and classification standards.
While both firms’ analysis relies on similar core components, such as clustering wallet addresses, classifying transactions, and detecting suspicious behavior, the differences may arise from the specific attribution data they have access to. Attribution data refers to information linking blockchain addresses to real-world entities, which can vary based on partnerships, intelligence sources, and law enforcement collaboration. Additionally, each firm relies on proprietary approaches to clustering addresses and defining classification taxonomies, which can further contribute to slight variation in reported figures.
However, their independent findings converge on one fact: illicit activity in crypto is now minimal, and Binance’s ratios are the lowest among major exchanges.
Binance’s 96-98% Reduction Since 2023
Both firms also tracked progress over time. Between January 2023 and June 2025, Binance reduced its direct exposure to illicit flows by between 96% (Chainalysis) and 98% (TRM Labs).
According to both datasets, that rate of improvement surpasses the other six CEXs’ average by 4-5 percentage points.
This progress is particularly notable given Binance’s trading scale: in 2025, the exchange processed an average of over $90 billion per day, facilitating around 217 million trades daily – numbers that exceed the combined throughput of many of our peers. Sustaining record-low illicit-fund exposure at this magnitude sets a new global benchmark for risk management and operational resilience.
How Binance Achieves These Results
Binance’s ability to maintain such low exposure is rooted in a multi-layered security and compliance framework that blends prevention, detection, and rapid response.
- Human and technological investment: Over 1,280 specialists, representing nearly 22% of Binance’s global workforce, work in compliance, investigations, and risk functions. The company invests hundreds of millions of dollars annually into KYC, transaction monitoring, financial crime investigation, and law enforcement cooperation.
- Collaboration with authorities: Binance has responded to over 240,000 law enforcement requests and conducted 400+ training sessions for investigators worldwide, sharing insights on blockchain tracing and fraud prevention.
- Partnerships for collective action: As a founding member of the Beacon Network and the T3+ global collaborator program (with Tether, TRON, and TRM Labs), Binance contributes to global real-time crime-fighting initiatives that freeze and recover illicit funds before they can circulate further.
- Refining transaction monitoring: Leveraging advanced analytics, AI, and machine learning, Binance has enhanced the precision of its monitoring systems, reducing false positives and improving the detection of illicit transactions.
These initiatives show that user protection goes beyond being reactive and is built into Binance’s structure.
A Broader Industry Transformation
The findings also highlight a deeper trend: the crypto industry is steadily shedding its early-stage vulnerabilities and becoming one of the most transparent financial systems in existence.
Blockchain’s open ledger allows investigators, regulators, and exchanges to track the flow of value in ways that are impossible in traditional finance. When combined with robust compliance frameworks and advanced analytics, that transparency produces tangible results: illicit volumes now account for a fraction of a percent of global crypto transactions.
This maturation has practical implications for regulators and institutions exploring blockchain adoption. It demonstrates that well-supervised exchanges, using modern analytics, can operate at global scale while maintaining standards that rival or exceed those of traditional markets.
Final Thoughts
The consensus between the crypto industry’s major data providers reinforces what data has been signaling for several years: crypto is cleaner than ever, and the progress is measurable.
Binance’s performance stands out because of our scale. Operating a platform with liquidity comparable to the next six exchanges combined while keeping illicit exposure several times lower than average is a testament to disciplined compliance and advanced technology.
As blockchain adoption accelerates, the industry’s challenge is to sustain this trajectory, continuing to share intelligence, refine detection tools, and uphold the transparency that makes digital assets inherently traceable. Binance’s leadership shows that with the right infrastructure and commitment, responsible growth and user safety can advance together.
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