Binance, one of the largest cryptocurrency exchanges in the world, is being investigated by the US Department of Justice and the Internal Revenue Service, as reported by Bloomberg.
Federal agencies are focused on possible Money Laundering Practices and Tax Crimes on Binance. For the investigation they have requested the collaboration of experts in the world of cryptocurrencies.
What’s more, It seeks to find out if the platform allowed Americans to carry out unauthorized operations, when buying derivatives without going through the Futures Products Trading Commission (CFTC).
Binance has said in preventing Americans from conducting illegal transactions on its website, warning that violators would find their accounts frozen.
«We take our legal obligations very seriously and engage with regulators and law enforcement collaboratively«, Said Binance spokesperson Jessica Jung, in a statement.
We have worked hard to build a robust compliance program that incorporates the anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity.
Illegal transactions and tax evasion, in the sights of the United States
Until now, the Department of Justice and the Internal Revenue Service have not formally indicted Binance. The details and scope of the investigation are scarce, due to its confidential nature.
However, in recent times, US officials have expressed concern that cryptocurrencies are being used for illicit transactions.
The efforts of the aforementioned federal agencies go beyond Binance and have focused primarily on in preventing illegal operations that include theft, money laundering, tax evasion and payment of drugs from occurring.
However, this is not the only thing. According to Bloomberg, citizens who have made windfall gains from the dramatic movements of cryptocurrencies lately are also being targeted.
Binance, in the middle of the crypto earthquake
Photo by André François McKenzie on Unsplash
A Chainalysis report appears to have been the trigger for this investigation. According to the financial fraud consultancy, more illicit transactions take place on Binance than on any other cryptocurrency platform.
The company tracked $ 2.8 billion worth of Bitcoin that was transferred to different platforms. 27% of that amount, that is to say 756 million dollars, would have ended up in Binance.
This week, the crypto world has taken several hits. Elon Musk announced that Tesla would stop receiving cryptocurrencies due to its enormous environmental impact.
“We are concerned about the rapid increase in the use of fossil energy for bitcoin mining and transactions, especially coal,” he said in a statement posted on Twitter.
Immediately, the value of the Bitcoin plunged 10% following Musk’s comments. This Thursday, following the Bloomberg report on the federal investigation into Binance, the aforementioned cryptocurrency returned to accelerate your losses.