Binance averts potential $2.4 billion in scam losses by 2024

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

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

Binance Internal Risk Engine

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

This year, Binance reports, it has avoided losses worth $2.4 billion, of which more than $1.1 billion, or about 45%, were attributed to withdrawals related to suspected crypto scams.

Commenting on the achievement, Binance Chief Technology Officer Rohit Wad said:

“Preventing more than $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 take the 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 revealed that Binance’s security team has recovered or frozen more than $73 million in user funds from external hackers as of July 31 this year. Interestingly, this amount is on top of 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 has received 63,000 inquiries from these entities compared to 58,000 in 2023. This increase has caused Binance to increase its compliance efforts.

As a result, he 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 go towards expanding the compliance team from 500 to 700 members by the end of 2024.

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