Key Highlights
- Chainalysis says Binance’s report used selective data and was not produced by the firm.
- Binance cited drops in illicit crypto exposure across top exchanges.
- Chainalysis recently expanded XRP Ledger monitoring as XRPL activity grows.
Binance’s November 17 report claimed that illicit crypto activity had fallen sharply, citing figures attributed to Chainalysis. The exchange also highlighted what it said was a steep drop in its own exposure to criminal funds.
Subsequently, Chainalysis clarified that the analysis was conducted by Binance using select data, not by Chainalysis itself. The firm noted that key illicit activity categories were excluded and that the methodology only counted direct flows, leaving out many common laundering paths.
Illicit crypto exposure is shrinking
In its report, Binance stated that figures from Chainalysis and TRM Labs show a decline in illicit crypto activity between early 2023 and mid-2025, with “direct exposure” on top exchanges representing only a fraction of the total volume.
The exchange also highlighted what it says is a 96–98% drop in its own exposure to illicit funds, calling it evidence of improved compliance at scale.
Chainalysis responds
Chainalysis countered that Binance conducted its own analysis using select Chainalysis datasets and that the firm itself did not perform or validate the study.
It also noted that the Binance review excluded major categories of illicit activity, such as ransomware and hacked funds, and analyzed only direct wallet exposure, overlooking multi-hop transfers often used to obscure fund origins.
Expanding ecosystem oversight
While distancing itself from Binance’s methodology, Chainalysis has been expanding its coverage elsewhere. In September, the firm enhanced its security and transparency tools for the XRP Ledger (XRPL), adding deeper token-monitoring capabilities as activity surges across the network.
XRPL has now processed over 3.3 billion transactions and continues to attract DeFi projects such as Doppler Finance.
What’s next
Market participants will watch whether Binance releases an updated methodology or broader dataset and whether regulators rely on third-party analytics or demand more standardized reporting.
Meanwhile, Chainalysis’s expanded XRPL tooling suggests the company is focused on strengthening monitoring across high-activity networks beyond the Binance dispute.
Also read: Chainalysis Warns DeFi’s $150B Market Faces Growing Security Risks
