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Binance Under Investigation! But Why?

Binance Under Investigation! But Why

World’s largest Crypto Exchange is under investigation by IRS and DOJ.

IRS (Internal Revenue Service) and DOJ (Department Of Justice) are digging deep into Binance. Bloomberg reports, with officials who handle money laundering and tax offenses, in particular, taking an interest in Binance’s business.

Officials investigating money laundering and tax violations have sought information from individuals with knowledge of Binance’s operations as part of the investigation, according to sources with knowledge of the case who asked not to be identified because the investigation is ongoing.

However, Cryptocurrency analytics firm Chainalysis a blockchain forensics firm whose clients include U.S. federal agencies reported that in 2019, some $756 million of $2.8 billion worth of criminal transactions involving the bitcoin cryptocurrency went through Binance.

As reported by The Verge,

“The company doesn’t comment on specific matters or inquiries and its legal obligations very seriously. 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. We have a strong track record of assisting law enforcement agencies around the world, including in the United States.”

Binance Spokesperson via email to The Verge

The probe comes after Germany’s financial authority, BaFin, warned Binance last month that it could face fines for selling securities-tracking digital tokens without first issuing an investor prospectus.

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. Such worries have been a hindrance to the industry going mainstream, even as Wall Street increasingly embraces Bitcoin and other tokens amid a global investing frenzy.

Jung, the Binance spokeswoman, said the exchange has never encouraged U.S. residents to use VPNs to get around its rules, as doing so would be something “that has always been contrary to our company’s principles.”

In January, Zhao tweeted that Binance’s security systems block Americans even if they try to connect through one of the networks. “We have implemented strong access controls that have been tested via external audit and are under continuous review and evaluation by Binance to ensure that the appropriate restrictions are in place and are effective,” Jung said.

Source: Economic Times

Binance’s record isn’t good when it comes to security. On May 7, 2019, Binance experienced a major hack that resulted in 7000 Bitcoins stolen from the exchange. a few days ago, after the colonial pipeline suffered ransomware by European hackers that triggered fuel shortages across the Eastern U.S. is the latest sign of what’s at stake. Colonial paid Eastern European hackers a nearly $5 million ransom in untraceable cryptocurrency within hours of the breach Now this will definitely surge hackers across the globe to have a try at Binance as well.

Anyways, If you are new to crypto, Binance Smart Chain is designed to be an easy onramp into the world of crypto and allow everyone, regardless of their wealth, social status, education, or place of birth, to participate in the digital revolution.

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Written by Hammad Khalid

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