- Binance is currently facing money laundering and tax evasion investigations by the US Justice Department and the Internal Revenue Service.
- The crypto exchange was also reportedly investigated by the Commodity Futures Trading Commission in March.
- The company stated that the exchange is collaboratively engaging with law enforcement.
The world’s largest crypto exchange by trading volume, Binance, is reportedly under investigation by the US Department of Justice and the Internal Revenue Service (IRS).
Binance CEO dismisses claims
While the subject of the investigation has not been revealed, officials who usually handle money laundering and tax offenses are involved, according to Bloomberg’s sources.
The IRS is targeting Binance users as well as the employees at the exchange. Currently, government agencies have not accused the exchange of any wrongdoing.
Cryptocurrency analytics firm Chainalysis discovered that in 2019 $756 million of $2.8 billion worth of illegal transactions involving Bitcoin went through the leading crypto exchange.
Binance spokesperson Jessica Jung stated that the company takes its legal obligations “very seriously and will engage with regulators and law enforcement in a collaborative fashion.” The firm’s CEO, Changpeng Zhao, also known as CZ, responded on Twitter, expressing that the report was misleading. He said:
The "news" title is bad. The article itself isn't so bad, actually (but who reads). It described how Binance collaborated with law enforcement agencies to fight bad players, but somehow made it look like a bad thing.
CZ dismissed the report as fear, uncertainty and doubt (FUD). However, the damage has been done as Binance Coin price plunged by over 12%, hitting a low of $552 in the past few hours. Bitcoin and Ethereum have also been affected by the heightened selling pressure.
Bloomberg reported that the Commodity Futures Trading Commission (CFTC) was also investigating Binance in March. According to the report, regulators were determining whether users of the Malta-based exchange's US platform purchased and sold cryptocurrency derivatives on its non-US platform.
The company claims that it prevents American residents from accessing investment products that would require registering with the government agency if it traded in the United States. Binance further clarified that it follows all legal and regulatory requirements within the countries in which it operates.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.