Binance, the world's biggest cryptocurrency exchange by trading volume, has received more than 47,000 requests from law enforcement since November 2021, seeking assistance in the tracking of illicit transactions, a senior executive said.
“These requests are for either user data or seizure request for funds, cases that are too complicated for law enforcement,” Nils Andersen-Roed, deputy head of financial crime compliance at Binance, told The National in an interview at the Leap technology exhibition in Riyadh on Wednesday.
However, he declined to provide a figure on how much in crypto funds have been recovered with the help of the platform so far.
The value of cryptocurrencies stolen hit a record $3.8 billion in 2022 as hacking activity remained rampant, blockchain platform Chainalysis said in a study last week.
The figure is up more than 15 per cent compared with the $3.3 billion recorded in 2021, and an almost eight-fold increase from 2020's $500 million, the New York-based company said.
Scams are the biggest problem facing the industry, targeting the most number of users in the crypto space, Mr Andersen-Roed said.
This requires “investing a lot of resources” and mapping out networks to trace stolen funds, he said.
The company has worked with US law enforcement on scams where victims are tricked into investing money after scammers slowly develop a relationship with them.
“Criminals will use anything that is useful for their types of activity,” Mr Andersen-Roed said.
However, tracking crime in cryptocurrency networks is easier compared to traditional financial systems thanks to the transparency of blockchain, he said.
“We're able to trace through crypto transactions, basically following the money and identifying the administrators through blockchain tracing because that’s public. You can follow all the money between exchanges,” Mr Andersen-Roed said.
Unlike, for example, withdrawing cash from a bank or an ATM, where “the trail ends there, as you can’t follow cash”.
Blockchain is the underlying technology behind cryptocurrencies and decentralised finance, which is generally considered to be a safer way to conduct transactions and one that could end up replacing middlemen, such as brokers and banks, in the financial system.
“If we see money flowing through our platform from a known illicit source, then the account will be blocked and reported to local authorities,” Mr Andersen-Roed said.
Other illicit areas that need more focus are terrorism financing networks and ransomware, he added.
The company has also conducted more than 70 workshops with regulators, judiciaries, law enforcement and central banks to explain how crypto companies operate and how they can collaborate with authorities.
“In order to counter those illicit networks and take them down, we need to focus on criminals, having the right controls in place and invest a lot of time in prevention and raising awareness,” he said.
“If we get that under control, it will be better for users and eventually investors.”
The cryptocurrency sector has also been rocked by company downfalls, with 2022 being one of the most tumultuous in its history: last year saw the implosion of several large crypto companies including Celsius, Three Arrows Capital and, most prominently, FTX, which filed for bankruptcy on November 11.
The collapse of FTX, once valued at $32 billion, rattled the entire industry, dealing a blow to those making a case for the viability of digital currencies and attracting more scrutiny from regulators on how they handle user assets.
In order to counter those illicit networks and take them down, we need to focus on criminals, having the right controls in place and invest a lot of time in prevention and raising awareness
Nils Andersen-Roed,
deputy head of financial crime compliance at Binance
Job losses have added to the industry's woes. Last month, Coinbase, one of the world's biggest crypto platforms, said it was slashing 20 per cent of its workforce, its third round of cuts in eight months.
The cryptocurrency industry’s market capitalisation, which peaked at more than $3 trillion in November 2021, has since declined; as of Wednesday, it stood at about $1.08 trillion — a plunge of almost two thirds — according to data from CoinMarketCap.
How quickly the sector will recover its value is difficult to predict, Mr Andersen-Roed said, acknowledging that what happened to some of the crypto companies is “bad for trust in the whole environment”.
“I don't have a crystal ball … but having some kind of stability is always nice. The more important goal in the long run is to have use cases for the technology itself,” he said.
“Cryptos and their value is one thing, on the other hand there are lots of new developments that use blockchain to develop new tools.”
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Label: Warner Records
Number of tracks: 11
Rating: 4/5
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Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Last year, he conquered K2, the world’s second-highest mountain located on the Pakistan-Chinese border
He carries dried camel meat, dried dates and a wheat mixture for the final summit push
His new goal is to climb 14 peaks that are more than 8,000 metres above sea level
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The five pillars of Islam
