Binance has a “Robust Compliance Program” to Detect Suspicious Activity, says Exchange on DOJ & IRS Probe Report

The exchange says they take legal obligations very seriously and have a “strong track record of assisting law enforcement agencies around the world.”


Binance is currently under investigation by the Justice Department, and Internal Revenue Service reported Bloomberg citing people with knowledge of the matter.

Reportedly officials who probe money laundering and tax offenses are seeking information. The exchange, however, hasn’t been accused of wrongdoing. Binance said in a statement,

“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.”

Founded in 2017, Binance is incorporated in the Cayman Islands, which said, “We have a strong track record of assisting law enforcement agencies around the world, including in the United States.”

“When you see FUD, click Unsubscribe,” tweeted Binance CEO Changpeng Zhao, further clarifying that he also unfollowed Tesla CEO Elon Musk, who sent the market crashing by announcing that the electric car maker won’t accept payment in BTC, citing environmental concerns.

Zhao further said that Bloomberg’s title, “Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths,” was “bad.”

The article described “how binance collaborated with law enforcement agencies to fight bad players, but somehow made it look like a bad thing….” Zhao commented.

IRS’s scrutiny goes back two months when it was also granted permission to issue a summons on another crypto exchange, Kraken, earlier this month. The agency is seeking information about all the taxpayers who conducted transitions worth more than $20,000 between 2016 and 2020.

Previously such John Doe summons was also issued on Coinbase and Circle as “part of an ongoing, extensive investigation involving substantial IRS resources that is producing real results.”

Not just in the US, other countries, as we reported, have been taking steps to tax crypto transactions with Japan and Hungary aiming to slash them to attract the crypto industry. Meanwhile, Canada Revenue Agency was also successful in March in obtaining court orders to compel cryptocurrency trading platforms to divulge information about unknown clients. Nic Carter, founding partner at Castle Island Ventures said,

“I think a lot of people are starting to realize that Gary Gensler is going to be much more aggressive, and the SEC commissioner is going to try and make his mark on the crypto industry.”

“A lot of these exchanges are hosting the trading of dubious products, things that resemble equity things that might be potentially brushing up against securities laws.”

Back in March, Bloomberg also reported that another US agency CFTC has been investigating Binance over whether it permitted Americans to make illegal trades, that is, let investors buy derivatives linked to crypto assets without being registered with them.

In October, federal prosecutors in Manhattan charged crypto derivatives platform BitMEX of violating the Bank Secrecy Act by allowing thousands of U.S. customers to trade while publicly claiming to restrict their access and lacking adequate anti-money laundering controls.

Three of the BitMex officials, including ex-CEO Arthur Hayes, pleaded not guilty and are scheduled to appear for trial in the U.S. next spring, March 2022.

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