A quiet shift in how Binance handles requests for user data is complicating efforts by international law enforcement to track illicit activity on the platform, according to a new report from The New York Times.
What Changed at Binance
The report describes a change to the exchange's compliance procedures that now routes many law enforcement requests through formal government-to-government channels rather than allowing investigators to obtain information more directly. In practice, that means police and prosecutors outside the United States must rely on mutual legal assistance treaties, a process that can stretch on for months or longer.
For investigators pursuing fast-moving crypto crimes, the delay can be significant. Digital assets can be moved across borders and through mixing services within minutes, and the added bureaucratic layer gives suspects more time to obscure or launder funds before authorities can act.
When investigators lose days to paperwork, criminals gain the time they need to disappear.
According to the report, the change has frustrated officials who previously counted on quicker cooperation from the world's largest cryptocurrency exchange. The treaty route is designed for cross-border legal cooperation but was never built for the speed at which crypto transactions occur.
Why It Matters
Binance has spent recent years trying to rebuild its standing with regulators after settling sweeping U.S. enforcement actions tied to money laundering and sanctions violations. The company has repeatedly emphasized its cooperation with authorities as a sign of its reformed compliance posture.
The new reporting raises questions about how that cooperation works in practice, particularly for agencies operating outside American jurisdiction. Critics argue that funneling requests through slow diplomatic treaties undercuts the exchange's public commitments to fighting financial crime.
Key concerns raised by the report include:
- Longer wait times for user data tied to active investigations
- Reliance on mutual legal assistance treaties not designed for crypto's speed
- Potential gaps that could let suspects move or hide funds
The findings are likely to intensify scrutiny of how major exchanges balance user privacy, legal process, and the practical demands of law enforcement in an industry where transactions cross borders instantly.