It is shocking news that Binance which is the world’s largest cryptocurrency exchange is facing the scrutiny from IRS and US Department of Justice (DoJ). It was initiated on 17-May-2021. The claims on money laundering and tax violations are found.

How does it happen?

What happen was that is founded in the Cayman Islands and Singapore. Binance is a meduim for buying and selling cryptocurrencies like Bitcoin. Even if the ongoing investigation is confidential, Bloomberg News reports investigators are questioning people who have vision into how Binance operates.

“The firm, like the industry it operates in, has succeeded largely outside the scope of government oversight,” Bloomberg News stated. Later Chainalysis Inc., a blockchain forensics firm whose clients consists of US federal agencies, resolved last year that among transactions that it examined. It is more funds tangled to criminal activity flowed through Binance than any other crypto exchange.

After that Binance had tweeted out a declaration defending itself:

“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” the crypto exchange mentioned. “We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity, Binance authorized it.

“We have a strong track record of assisting law enforcement agencies around the world, including in the United States.”

IRS agents are investigating the ways of Binance’s customers and its employees, rendering to Bloomberg. Federal investigators are observing into whether Binance has been permitting Americans to make illegal trades on its platform.

“U.S. officials have expressed concerns that cryptocurrencies are being used to conceal illegal transactions, including theft and drug deals, and that Americans who’ve made windfalls betting on the market’s meteoric rise are evading taxes,” Bloomberg described.

For instance, in the new ransomware attack against Colonial Pipeline, liable for fuel shortages on the East Coast. This pipeline company is alleged to have remunerated the hackers a $5 million ransom in virtually unnoticeable cryptocurrency.

Shivangi Mujumdar

CBW - External Analyst

INDIA