Binance and its former CEO, Changpeng “CZ” Zhao, are facing a new class action lawsuit from three crypto investors who say they couldn’t recover their stolen crypto because the exchange failed to prevent money laundering.

In an Aug. 16 class action suit filed in the United States District Court for the Western District of Washington, Seattle, the plaintiffs allege their crypto was stolen, and those funds were sent to Binance by the thieves to “remove the connection between the ledger and their digital assets,” making them untraceable. 

The plaintiffs argued that a key attribute of crypto transactions is “a permanent record of those transactions” on the blockchain, which makes them “permanently and accurately traceable.”

“Therefore, without a place to launder crypto, such as Binance.com, if a bad actor steals someone else’s crypto, there is a risk the authorities would eventually track them down by retracing their steps on the blockchain,” the class action suit alleges.

The plaintiffs say Binance was an essential part of the money laundering process, which violates the Racketeer Influenced and Corrupt Organizations Act.