Binance, the world’s leading cryptocurrency exchange is reportedly facing an investigation from Justice Department and IRS according to a report from Bloomberg. The report cites that the agency involved in investigating money laundering and tax offenses has sought information on crypto transactions on Binance.
While there is no direct accusation as such from either of the two mentioned agencies, the report cites close anonymous sources to claim investigation agencies have sought necessary trading information on exchange from people aware of Binance businesses which don’t amount to an investigation.
Binance spokeswoman Jessica Jung in an official statement said that the company cannot comment on matters under investigation but reassured they would work with the agencies and offer full cooperation in the matter. She said,
“We take our legal obligations very seriously 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 and address suspicious activity.”
Changpeng Zhao, the CEO of the firm sent out a cryptic tweet right after the news broke out.
So much FUD today.
It's a pain for some, an opportunity for others.
— CZ 🔶 Binance (@cz_binance) May 13, 2021
As per a recent Chainalysis report, the majority of crypto transactions linked to criminal activities have flown to Binance when compared against other exchanges The cryptocurrency exchange was recently investigated by CFTC for offering leverage trading to US customers as well.
Binance has also been on a hiring spree in the US to help it clear regulatory hurdles to expanding its operation in the US markets. Over the past month, the exchange has hired two former FATF executives as its regulatory and compliance advisor.
Binance is Working Extensively to Penetrate the US Markets
Binance has achieved success in most of the markets it has entered up until now except the United States. The exchange had to establish a stand-alone venture in the form of Binance.US a couple of years ago but despite that, it has continued to face regulatory hurdles from time to time. The recent hiring spree and change of CEOs in the form of former OCC chief Brian Brooks shows the platform’s willingness to work towards making the crypto ecosystem more transparent.
The exchange has managed to sort out most of the regulatory misunderstandings with the authorities in the past and even in the current scenario it hasn’t faced any direct accusations from the investigation agencies. CZ commented on the growing FUD owing to the report of possible investigation when there is nothing as such and 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… 🤔 Anyways. Back to work.