Binance Crypto Exchange Under DOJ Investigation To Target Money Laundering And Tax Evasion

Operation “Hidden Treasure” was initiated by the Internal Revenue Service (IRS) and Department of Justice (DOJ) on Thursday in an effort to uncover the unreported crypto income of U.S. citizens and other illegal activities taking place on the platforms.

The IRS has recently started investigating various crypto platforms to try to discover illicit activities, ramping up its crypto-related auditing and guidance for individuals that own and trade cryptocurrency.

Chainalysis, a blockchain forensics firm whose clients include U.S. federal agencies, concluded last year that among transactions that it examined, more funds tied to criminal activity flowed through Binance than any other crypto exchange. The firm tracked Bitcoin worth $2.8 billion USD that moved on to trading platforms in 2019. Chainalysis determined that roughly 27%, or $756 million, has been hidden on Binance. The exchange has assured regulators that they have done as much as possible to stay within the current regulatory framework.

As recently reported by Bloomberg, the Commodity Futures Trading Commission (CFTC) is also probing Binance (not registered with CTFC) to find out if it allowed U.S. residents to trade derivatives. The CFTC previously filed a civil lawsuit to halt the U.S. commodity derivatives business of BitMEX, which is one of the world’s largest cryptocurrency derivatives exchanges. Exchanges are now, more than ever, under regulatory scrutiny.


The repercussion on Bitcoin price

Bitcoin (BTC) losses accelerated Thursday after Bloomberg reported the Binance investigation.

Many of the top cryptocurrencies dropped in price, down double digits. Bitcoin fell 10% after the news, continuing the negative run it experienced after Tesla announced it would stop accepting Bitcoin as payment for their vehicles.

Robert Drage

Robert Drage

Robert is a freelance researcher, with a background in information science currently interested in blockchain technology and technical developments in the field.

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