😱 New trends in the crypto industry: how exchanges cooperate with authorities

😱 New trends in the crypto industry: how exchanges cooperate with authorities

Measures taken to combat terrorism and money laundering…

💠 Preamble: recently, news emerged that Binance (which, it should be recalled, left Russia🇷🇺 in 2023), provided Russian authorities with user data requested by a court as evidence in a terrorism financing case. The case generated a strong reaction, but similar situations occur frequently in different countries.

💠 Current situation: the era of anonymity in digital assets has largely come to an end. Names, addresses, telephone numbers, passport details and photographs are part of the standard set of information often provided to third-party KYC providers to verify users' identities and retained for several years. Information on transactions conducted on exchanges is, in turn, retained for an average of 3-5 years after the end of the relationship with the user and may also be disclosed at the request of authorities. This is a strictly regulated procedure carried out on the basis of judicial or prosecutorial requests.

💠 Trend: when there is no mutual legal assistance treaty between the country where the government authority is located and the country where the exchange is registered, the exchange, under its applicable legislation, is not required to respond to a request from a foreign state. However, in practice, many platforms voluntarily provide information at the request of government authorities. Some also use specialized systems to process requests from law-enforcement agencies, thereby formalizing cooperation with authorities.

💠 Cooperation against financial crime: there are cases in which exchanges join groups to respond to cryptocurrency-related crimes involving illicit addresses in real time. One such initiative is Beacon Network, developed by blockchain analytics company TRM Labs. Participants include Coinbase, Binance, Kraken, OKX, Crypto.com and Bitfinex, as well as other platforms and law-enforcement agencies from the United States🇺🇸, Canada🇨🇦, the United Kingdom🇬🇧, Germany🇩🇪, Australia🇦🇺, South Korea🇰🇷 and other countries.

💠 Some figures: according to a report by U.S. cryptocurrency exchange Kraken, in 2025 it received nearly 8,000 requests from law-enforcement and government agencies in 74 countries, approximately 15% more than the previous year. The jurisdictions most frequently represented among its customers were the United States (27.8%), the United Kingdom (11.3%) and Germany (6.2%).

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