Binance Investigated By Us For Money Laundering, Tax Detectors Dig Down

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Changpeng Zhao (CZ), chief executive officer of Binance. © 2018 BLOOMBERG FINANCE LP

Binance, one of the largest exchanges in the cryptocurrency world, is being investigated by the IRS (Internal Revenue Service) and the DOJ (Department of Justice). U.S. government entities seek information from people with insight into exchange management practices.

According to a Bloomberg report, Binance Holdings is currently under investigation by the US Department of Justice (DOJ) and the Internal Revenue Service (IRS). The goal is to try to elucidate the illegal activities that have found refuge in the unregulated cryptocurrency market and its largest exchange.

According to an anonymous source with extensive knowledge of Binance’s practices, officials responsible for money laundering and tax crimes are starting to ask questions. The exchange, led by Changpeng Zhao, has established itself to dominate the current crypto exchange market since its opening in 2017.

In an official statement, Jessica Jung, spokesperson for Binance, said, “We take our legal obligations very seriously and are committed to working with regulators and law enforcement.”

Despite a policy of not commenting on specific requests, Ms. Jung added, “We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and the tools used by financial institutions to detect and deal with suspicious activity. ”

Recently, blockchain analytics firm Chainalysis, working with U.S. federal agencies, found that more funds linked to criminal activity are flowing through Binance than through any other exchange.

This has apparently sparked concern among U.S. officials, who fear cryptocurrencies may be used to conceal illegal transactions and contribute to tax evasion.

U.S. officials involved in the investigation include federal prosecutors from the DOJ’s Banking Integrity Unit and attorneys from the U.S. Attorney’s Office. Details of the investigation by these officials are not yet known.

This is not the first time Binance has come under scrutiny from a government. The company has faced regulatory issues in Europe for its stock trading services and has even received public soap from German regulators.

As of this writing, neither the DOJ nor the IRS has issued an official statement regarding this matter.

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