Binance announced that it has prevented over $2.4 billion in losses from potential scams and fraudulent activities that could have affected over 1.2 million users between January and July 2024 thanks to its risk management measures.
According to the official press release shared with CryptopotatoBinance employs an in-house 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 cryptocurrency exchange platform to accurately detect and address suspicious transactions in a timely manner, protecting users across multiple sectors such as P2P trading, payments, and cryptocurrency withdrawals on the network. The risk engine integrates multiple layers of controls to effectively manage and mitigate risk. The report also indicated that the most frequent signaling of suspicious activity occurs during the cryptocurrency withdrawal phase.
This year, Binance has reportedly avoided losses worth $2.4 billion, of which more than $1.1 billion, or around 45%, was attributed to withdrawals related to alleged cryptocurrency scams.
Commenting on the achievement, Binance CTO Rohit Wad said:
“Preventing over $2.4 billion in potential losses in just seven months is a testament to our hard work and dedication over the years. We are pleased that our efforts are helping to create a safer ecosystem for users and we will continue to uphold our responsibility as industry leaders by regularly improving our systems and capabilities to stay ahead of potential threats.”
This announcement comes shortly after another report Binance’s security team is reported to have recovered or frozen over $73 million in user funds from external attacks as of July 31 this year. Interestingly, this amount exceeds the roughly $55 million recovered throughout 2023.
Emphasis on compliance
Binance CEO Richard Teng recently noted A significant increase in law enforcement requests globally. So far this year, the cryptocurrency exchange platform received 63,000 queries from these entities compared to 58,000 in 2023. This increase has led Binance to step up its compliance efforts.
As a result, it expects compliance-related spending to increase, up from $158 million spent two years ago. The company also plans to hire 1,000 new employees this year, with a primary focus on compliance roles. 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.
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