Binance Crypto Exchange Reportedly Under U.S. Investigation For Money Laundering
Officials from the United States Department of Justice (DoJ) and Internal Revenue Service (IRS) are currently probing Binance, the world's largest cryptocurrency exchange, for illegal activity including money laundering and various tax offenses, according to a report. Details of the investigation are not clear, though it appears the agencies are looking into both Binance's users and some of its employees.
Binance CEO Changpeng Zhao founded the popular cryptocurrency exchange in 2017. It initially operated out of China, but later relocated to the Cayman Islands because of China's ban on cryptocurrency trading platforms. Binance is also said to have an office located in Singapore.
In response to the report, Zhao sent out a series of tweets saying it was helping with the investigation, and that it condones the kind of illegal activity at the heart of the probe.
"We take our legal obligations very serious 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 an address suspicious activity," Zhao said.
Zhao also claimed Biance has a strong track record of assisting law enforcement agencies around the world, the United States included. However, it's said IRS agents have been looking into Binance's operations for months, suggesting it's not just the exchange's customers that are under investigation, but also people who work for the company.
The lack of details and public silence on the matter from the IRS and DoJ should prevent anyone from jumping to any conclusions, though. It is entirely possible that Binance is fully cooperating with the investigation, as Zhao alludes, and that specific customers are the ones being looking into. There is just no way of knowing right now.
Still, this is not a great look. As the report on the investigation into Binance points out, the exchange's track record is a bit sketchy. For example, two men from Florida were recently charged with trafficking fentanyl online, one of which deposited the funds from the operation into a Binance account. And during the same month, the DoJ tried procuring $450,000 worth of cryptocurrency in Binance, tied to ransomware attacks on multiple US companies.
News of the investigation comes after cyberattackers reportedly extorted $5 million in cryptocurrency from Colonial Pipeline, after hacking the company's computer systems, installing ransomware, and disrupting the supply of gasoline. Fun times, eh?