World’s biggest crypto exchange under federal investigation

Binance faces money laundering probe by IRS and Justice Department

Binance, the world’s largest cryptocurrency exchange, is under IRS and US Department of Justice (DOJ) investigation, following allegations of money laundering and tax violations, according to reports.

Based in the Cayman Islands and Singapore, Binance is a platform for buying and selling cryptocurrencies like Bitcoin. Although the ongoing probe is confidential, Bloomberg News reports investigators are interviewing people who have insight into how Binance operates.

“The firm, like the industry it operates in, has succeeded largely outside the scope of government oversight,” Bloomberg News reported. “Chainalysis Inc., a blockchain forensics firm whose clients include U.S. federal agencies, concluded last year that among transactions that it examined, more funds tied to criminal activity flowed through Binance than any other crypto exchange.”

In response, Binance tweeted out a statement defending itself.

“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” the crypto exchange said. “We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity. 

“We have a strong track record of assisting law enforcement agencies around the world, including in the United States.”

Related Resource

Cost of a data breach report 2020

Find out what factors help mitigate breach costs

cost of a data breach report 2020 - whitepaper from IBMDownload now

IRS agents are investigating the conduct of Binance’s customers and its employees, according to Bloomberg. Federal investigators are looking into whether Binance has been allowing Americans to make illegal trades on its platform. 

“U.S. officials have expressed concerns that cryptocurrencies are being used to conceal illegal transactions, including theft and drug deals, and that Americans who’ve made windfalls betting on the market’s meteoric rise are evading taxes,” Bloomberg reported.

For example, in the recent ransomware attack against Colonial Pipeline, responsible for gas shortages on the East Coast, the pipeline company is said to have paid the hackers a $5 million ransom in virtually untraceable cryptocurrency. 

Featured Resources

The definitive guide to warehouse efficiency

Get your free guide to creating efficiencies in the warehouse

Free download

The total economic impact™ of Datto

Cost savings and business benefits of using Datto Integrated Solutions

Download now

Three-step guide to modern customer experience

Support the critical role CX plays in your business

Free download

Ransomware report

The global state of the channel

Download now

Recommended

DoJ fines former intel operatives who provided hacker-for-hire services to UAE
hacking

DoJ fines former intel operatives who provided hacker-for-hire services to UAE

15 Sep 2021
Senators accuse Amazon of mistreating pregnant workers
Policy & legislation

Senators accuse Amazon of mistreating pregnant workers

10 Sep 2021
Dual citizen sentenced to 11 years for role in North Korean crypto hacking scheme
hacking

Dual citizen sentenced to 11 years for role in North Korean crypto hacking scheme

10 Sep 2021
Commerce Department creates an artificial intelligence committee
Policy & legislation

Commerce Department creates an artificial intelligence committee

9 Sep 2021

Most Popular

What are the pros and cons of AI?
machine learning

What are the pros and cons of AI?

8 Sep 2021
Google takes down map showing homes of 111,000 Guntrader customers
data breaches

Google takes down map showing homes of 111,000 Guntrader customers

2 Sep 2021
Intuit plans end-to-end SMB platform after $12 billion Mailchimp acquisition
mergers and acquisitions

Intuit plans end-to-end SMB platform after $12 billion Mailchimp acquisition

14 Sep 2021