Binance is under investigation by the Internal Revenue Service (IRS) and U.S. Department of Justice (DoJ), according to a report by Bloomberg.
Though nothing has been announced by either government department, the report says that the Justice Department’s bank integrity unit, who are in charge of international money laundering cases, are at least partly at the head of the investigation.
If the focus of the investigation is indeed money laundering, this would align with figures published by Chainalysis in 2020 which showed that 27.5% of the $2.8 billion worth of criminal BTC tracked in 2019 ended up on Binance’s exchange—the single biggest recipient of illicit BTC that year.
It would also line up with earlier reports that Binance was being investigated by the Commodity Futures Trading Commission (CFTC) for potentially serving citizens of New York state in contravention of digital asset laws, which would open the door to specific and serious violations of the CFTC regime.
Though the investigation is currently confidential and has yet to be confirmed by officials, it is not surprising. There has been considerable smoke surrounding Binance in the past few years. In addition to the aforementioned Chainalysis figures and CFTC investigation, Binance also appeared in everything-but-name in a report by the intergovernmental Financial Action Task Force (FATF) as an exchange known to ‘shop’ around different jurisdictions in order to avoid the more stringent requirements of the U.S. and find the least regulated market available.
The investigation will be welcomed by those pushing for a more honest industry.
hahaha…as I have long predicted, all companies involved in delist attack on BSV end up being involved in crime….Binance is the most criminal actiity in crypto.https://t.co/OFApMzsDaI
— Calvin Ayre (@CalvinAyre) May 13, 2021
The BitMEX fiasco was in large part started by investigations by the DoJ and CFTC. The chain of events from that point on were catastrophic for that company: its founders were indicted and a cascade of civil suits have been filed by users of the platform. Where is this one headed?
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
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