Binance, one of the most important cryptocurrency exchanges in the world, could be facing an investigation by both the United States Justice Department (DOJ) and Internal Revenue Service (IRS) according to Bloomberg.
The investigation would be the result of the US efforts to stop illegal activities that have found a way to take advantage of the decentralized and private nature of the cryptocurrency market, which despite certain legislations and controls remains highly unregulated.
According to Bloomberg sources, officials from both governmental agencies have been looking into information from individuals who might have insight into the way Binance handles its business, which could lead to important findings regarding money laundering and tax evasion.
According to a report by blockchain forensics company, Chainalysis concluded that Binance was a specially attractive platform for criminals looking to use crypto exchanges to manage their funds.
Jessica Jung, Binance spokeswoman, referred to the report by stating:
“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. ”
The scope of the investigation is still unknown as no allegations of wrongdoing were done in all of the inquiries, but seem to include not only the exchange’s user base but also its employees.
Cryptocurrency and Money Laundering Are Not Such a Perfect Match
While cryptocurrencies have been widely stigmatized by governments, regulatory entities, and critics as an easy way for criminals to make use of their illegal money, a report by Chainalysis found that criminal activity only represented about 2.1% of all cryptocurrency transaction volume.
The same report also shows that in 2020, the criminal share of all cryptocurrency transaction volume was even…