Incorporated in the Cayman Islands, Binance has largely operated outside the scope of U.S. regulations, and blockchain forensics firm Chainalysis — which works with various federal agencies — reported that more funds tied to criminal activity have flowed through Binance than any other crypto exchange on the market.
On top of money laundering, U.S. regulators are also looking into whether the crypto exchange allowed American investors to trade illegally. Binance is currently banned in the country since it offers various tokens and securities that aren’t registered with the U.S. Commodity Futures Trading Commission, and while the platform has rejected these claims, Bloomberg says that the company had previously advised its American customers to use VPNs to bypass these restrictions.
“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” said Binance spokeswoman Jessica Jung in an emailed statement responding to the probe and reports. “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.”
Both the DoJ and IRS have refused to comment on the probe.
Elsewhere in related news, Dogecoin developers have revealed that Elon Musk has worked with them since 2019.