Binance has now become the subject of a money laundering investigation.
Following allegations surrounding money laundering and tax violations, Binance Holdings Ltd., is facing a federal investigation by the Internal Revenue Service and the U.S Department of Justice.
According to Bloomberg, government officials have been seeking information from people who have insight into Binance’s business dealings and exploring possible money-laundering and tax-related offenses by both the exchange’s staff and customers.
The investigation comes after a report by Chainalysis, a blockchain forensic firm, traced $2.8 billion worth of illicit bitcoin on exchange and trading platforms, of which $756 million went through Binance.
The crypto exchange said:
“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion. 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.”
Concerns have been raised regarding cryptocurrencies being used to conceal illegal transactions and those ”who’ve made windfalls betting on the market’s meteoric rise are evading taxes,” Bloomberg reported.
The cyber-attack against Colonial Pipeline Co, which triggered fuel shortages across the Eastern U.S. resulted in the company paying the hackers a $5 million ransom in intracetable cryptocurrency within hours.
Binance is also currently under investigation by the United States Commodity Trading Futures Commission (CTFC) for allowing U.S. investors to buy and sell derivatives.
For more information make sure to tune into Nick Furneaux’s talk “Crypto 2.0 - New ways of performing old tricks? Exploring Crypto Typologies” at FinCrime World Forum on Wednesday 23 June at 2:50pm.