Binance Prevents $2.4 Billion in Potential Losses from Scams in 2024

Binance announced that it has prevented over $2.4 billion in losses from potential scams and fraudulent activities that could have impacted more than 1.2 million users from January to July 2024 owing to its risk management measures.

According to the official press release shared with CryptoPotato, Binance employs an internal risk engine that provides 24/7 real-time monitoring using a combination of artificial intelligence (AI) and manual reviews.

Binance’s Internal Risk Engine

This system enables the crypto exchange to accurately detect and address suspicious transactions promptly, protecting users across various sectors such as P2P trading, payments, and crypto network withdrawals. The risk engine integrates multiple layers of controls to manage and mitigate risk effectively. The report also stated that the most frequent flagging of suspicious activities occurs during the crypto withdrawal phase.

This year, Binance has reportedly prevented losses worth $2.4 billion, of which, over $1.1 billion, or about 45%, was attributed to withdrawals related to suspected crypto scams.

Commenting on the achievement, Binance’s Chief Technology Office Rohit Wad said,

“Preventing over $2.4 billion in potential losses over just seven months is a testament to our hard work and dedication over the years. We are glad that our efforts are helping to create a safer ecosystem for users, and we will continue to embrace our responsibility as an industry leader by regularly improving our systems and capabilities to stay ahead of potential threats.”

This announcement comes shortly after another report revealing that Binance’s security team has recovered or frozen over $73 million in user funds from external hacks as of July 31 this year. Interestingly, this amount surpasses the approximately $55 million recovered throughout 2023.

Emphasis on Compliance

Binance CEO Richard Teng recently noted a significant increase in requests from law enforcement agencies globally. So far this year, the crypto exchange received 63,000 inquiries from these entities compared to 58,000 in 2023. This rise has led Binance to boost its compliance efforts.

As a result, it anticipates an increase in compliance-related spending beyond the $158 million spent two years ago. The company also plans to hire 1,000 new employees this year, with a major focus on compliance positions. A significant portion of these new hires will be dedicated to expanding the compliance team from 500 to 700 members by the end of 2024.