Bloomberg: The world’s largest cryptocurrency exchange is investigated by the US anti-money laundering agency

As part of the investigation, officials investigating money laundering and tax violations sought information from sources close to Binance’s business.

Led by Changpeng Zhao, a frequent cryptocurrency promoter on Twitter and in interviews, Binance has outperformed the competition since he co-founded it in 2017. Just like the crypto space, This company operates with little government oversight. Binance was founded in “tax haven” Cayman and has an office in Singapore.

Meanwhile, Chainalysis Inc. – a blockchain forensics firm whose clients are US federal agencies, concluded last year that, of the transactions it examined, many were related to criminal activity went through Binance. This amount is larger than any cryptocurrency exchange.

U.S. officials have long expressed concern that cryptocurrencies are being used to mask illegal transactions, including theft and drug trafficking, among others. The US is evading taxes when betting on the cryptocurrency market. Such concerns have become a stumbling block for the sector, as it aims to gain more recognition, even though many Wall Street banks have already accepted Bitcoin and other cryptocurrencies.

Currently, the Department of Justice and the IRS are investigating criminal violations against Binance. However, Bloomberg has not identified the specifics of what officials are investigating.

This month’s cyberattack against Colonial Pipeline Co. which has caused fuel shortages across the eastern United States is a sign of great danger. After that, Colonial had to pay the hackers from Europe nearly 5 million USD in cryptocurrency ransom.

Officials involved in the investigation include prosecutors in the US Department of Justice’s banking ethics division, which investigates complex cases targeting financial firms, and regulators. from the US Attorney’s Office in Seattle. A source revealed that the investigation by the agencies has been going on for months, they are looking into both the behavior of customers as well as the employees of Binance.

In addition, Bloomberg reported in March, the US Commodity Futures Trading Commission (CTFC) also investigated Binance for whether the company allowed Americans to conduct illegal transactions. Thereafter, Americans were prohibited from purchasing crypto-linked derivatives trading products without registering with the CTFC.

According to a Chainalysis report on crypto-related criminal transactions, the company tracked down $2.8 billion worth of Bitcoins that it suspected crooks moved into trading platforms in 2019. According to Chainalysis, about 27% of that ($756 million) went to Binance. However, in a response to this news, Binance said it complies with anti-money laundering regulations in the area in which they operate and is working with Chainalysis to improve the system.