Daily Management Review

Bloomberg: Binance investigated by US tax officials and prosecutors


The Department of Justice and the US Internal Revenue Service (IRS) have launched an investigation into one of the largest cryptocurrency exchanges, Binance. The investigation into the cryptocurrency trading platform was reported by Bloomberg, citing sources familiar with its details.

Marco Verch via flickr
Marco Verch via flickr
According to the agency's sources, the investigation is being led by agency officials investigating money laundering and tax crimes. They have sought information from people with knowledge of Binance's business. No specific allegations of wrongdoing have yet been made against the exchange, but the investigation involves prosecutors from the Justice Department's Bank Integrity Unit (which investigates complex cases against financial services companies), and investigators from the US Attorney's Office in Seattle. 

One of the agency's interlocutors said that scrutiny by IRS agents has been underway for several months, and their questions are aimed at investigating the actions of both Binance customers and its employees. Chainalysis, a company that specialises in researching shadowy blockchain transactions (its clients are US government agencies), estimated in 2020 that among the transactions it examined, more funds related to criminal activity passed through Binance than through any other cryptocurrency exchange.

Representatives from the Ministry of Justice and the Internal Revenue Service declined to comment. In March, cryptocurrency exchange Binance became the subject of an investigation by the Commodity Futures Trading Commission (CFTC). The regulator investigated the company for allowing US residents to trade crypto derivatives without a licence.

source: bloomberg.com