Binance, the world’s biggest cryptocurrency exchange, is being investigated by the U.S. Department of Justice and Internal Revenue Service over alleged illegal activities.
Officials responsible for investigating money laundering and tax breaches have interviewed individuals familiar with Binance’s activities, according to a report by Bloomberg.
In March, the U.S. Commodity Futures Trading Commission said it had opened an investigation to determine whether Binance had allowed Americans to trade derivatives linked to digital tokens. Binance is not registered with the CFTC — a requirement for permitting such trades. It is incorporated in the Cayman Islands and has an office in Singapore.
The Binance probe comes after blockchain forensics firm Chainalysis, whose clients include U.S. federal agencies, released a report last year that more funds associated with criminal activity were processed through Binance than any other cryptocurrency exchange.
Of the $2.8 billion worth of Bitcoin suspected to be linked with criminal activity in 2019, roughly 27 percent, or US$756 million, flowed through Binance, according to Chainalysis.
Concerns voiced by U.S. and other officials that digital currencies are being used by criminals to conceal illegal earnings from theft and drug deals, and to evade taxes, are among the factors hindering the growth of cryptocurrency in the mainstream finance sector.
