Friday, May 14th 2021

Binance, World's Largest Crypto Exchange, Reportedly Under Investigation by DoJ, IRS

Binance, the world's largest crypto exchange in trade volume, is reportedly being investigated by both the US Department of Justice and the IRS. Ever since its founding in 2017, Binance has been the de-facto castle door towards the world of crypto - that the eyes of justice and fiscal-enforcement are set upon it shouldn't come as a surprise. Incorporated in the Cayman Islands - a well-known offshore paradise for avoidance of taxation - the firm has an operating office in Singapore, and has thus been able to skirt massive amounts of tax (though not unlike many other, more traditional businesses do). The investigation also shouldn't come as a surprise considering how cryptocurrency - for all its technological and economic impact - is now one of the more common currencies in usage for the enablement and support of illegal activities.

According to Chainalysis.inc, a company specializing in scrutinizing the crypto market and its players, Binance was the principal crypto exchange through where funds derived from illegal activities went. According to the company, the amount of money attributed to illegal activities isn't low either; Chainalysis estimated Binance was the gateway of choice for moving upwards of $756 million dollars in illegal activities, a tidy percentage of its 2.8 billion dollar flux in that same year. No formal investigation has been announced yet, but this could be the prelude to a deeper dive onto the company's finances and possible enablement of criminal activity.
Source: TechSpot
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66 Comments on Binance, World's Largest Crypto Exchange, Reportedly Under Investigation by DoJ, IRS

#1
R-T-B
I mean I use coinbase, as do most legit traders at least stateside. I feel like other less legit exchanges can't die fast enough frankly. These shady ops need to go.
Posted on Reply
#2
elghinnarisa
R-T-BI mean I use coinbase, as do most legit traders at least stateside. I feel like other less legit exchanges can't die fast enough frankly. These shady ops need to go.
Have you seen coinbase subreddit? 9/10 posts are about how they fucked something up. Pretty much all cryptoexchanges are equally horrible in one way or another.
Posted on Reply
#3
R-T-B
elghinnarisaHave you seen coinbase subreddit? 9/10 posts are about how they fucked something up. Pretty much all cryptoexchanges are equally horrible in one way or another.
Well aware. Most of the posts about them fucking something up are money hold complaints due to their accounts being flagged for something most likely suspicious. They operate out of an abundance of caution and that's evidence for, not against it. Report your taxes, act responsibly, and you most likely will never experience this.

Also, I know this is friggin crazy, but complete the identity validation and things suddenly tend to work.

So no, there are far far more badly run exchanges than coinbase. Coinbase is the paypal of crypto, as they comply to KYC laws.
Posted on Reply
#4
Hemmingstamp
R-T-BWell aware. Most of the posts about them fucking something up are money hold complaints due to their accounts being flagged for something most likely suspicious. They operate out of an abundance of caution and that's evidence for, not against it. Report your taxes, act responsibly, and you most likely will never experience this.

Also, I know this is friggin crazy, but complete the identity validation and things suddenly tend to work.

So no, there are far far more badly run exchanges than coinbase. Coinbase is the paypal of crypto, as they comply to KYC laws.
Actual user reviews are always welcome. Thanks froggy. :)
Posted on Reply
#5
Dristun
Haha, they'll cooperate, get slapped with a fine at the end, then the process will repeat with another exchange. Big exchanges are simply another part of the good old financial world now. And that 756$ million connected to illegal activities? Peanuts. Check various estimates for global volume of just the laundering, aside from everything else.
Posted on Reply
#6
R-T-B
DristunCheck various estimates for global volume of just the laundering, aside from everything else.
Links? Most of the "laundering data" that was disconcertingly high is years old now. I really don't think it's a large scale issue like it used to be.

Don't get me wrong... it exists. But it's lessening year by year.
Posted on Reply
#7
sepheronx
I too am on coinbase. So far I have been happy with its service. Never used binance though.
Posted on Reply
#8
evernessince
elghinnarisaHave you seen coinbase subreddit? 9/10 posts are about how they fucked something up. Pretty much all cryptoexchanges are equally horrible in one way or another.
That's every company reddit ever.
Posted on Reply
#9
mb194dc
DOJ will throw the book at them. When hackers wanted payment for the pipeline ransom, what do they want it in.. Fully expect crypto currencies as we currently know them to ultimately be banned entirely.

They're only useful for speculation and illegal activity. Neither of which has anything positive about it from the governments perspective.
Posted on Reply
#10
elghinnarisa
R-T-BWell aware. Most of the posts about them fucking something up are money hold complaints due to their accounts being flagged for something most likely suspicious. They operate out of an abundance of caution and that's evidence for, not against it. Report your taxes, act responsibly, and you most likely will never experience this.

Also, I know this is friggin crazy, but complete the identity validation and things suddenly tend to work.

So no, there are far far more badly run exchanges than coinbase. Coinbase is the paypal of crypto, as they comply to KYC laws.
I been waiting 4 months on a withdrawal and I been a active user on coinbase since 2018 and I have yet to get a single reply from their customer support. Well, except three weeks ago when they thought me wanting my money was a feature request, that was nice one. To call them a joke is being way too kind to them.
Posted on Reply
#11
Hemmingstamp
mb194dcDOJ will throw the book at them. When hackers wanted payment for the pipeline ransom, what do they want it in.. Fully expect crypto currencies as we currently know them to ultimately be banned entirely.

They're only useful for speculation and illegal activity. Neither of which has anything positive about it from the governments perspective.
I take it you don't like Crypto then :)
Posted on Reply
#12
R-T-B
elghinnarisaI been waiting 4 months on a withdrawal and I been a active user on coinbase since 2018 and I have yet to get a single reply from their customer support. Well, except three weeks ago when they thought me wanting my money was a feature request, that was nice one. To call them a joke is being way too kind to them.
Were you ID validated?
Posted on Reply
#13
elghinnarisa
R-T-BWere you ID validated?
Yes, I did that years ago.
I dont know how many transactions I done on coinbase, never did have an issue. But thats generally not a good thing for me. Thats just how its supposed to be, a bare minimum. Its how a company handles fudges that really show what they are. In this case, worthless.
Posted on Reply
#14
Patriot
The almighty dollar in cash form funds illegal activity 100:1 over crypto as much as the govt would like you to believe.
Pay your taxes on it and you will be fine... they just don't like being out of control.
Posted on Reply
#15
silentbogo
That's DOJ and IRS being stupid and greedy once again. Binance explicitly does not work with US of A, so if there's a case of tax evasion or illegal activities, it's US citizens that use Binance who should be investigated. It's a simple case of going after one offshore company being a tad easier, more manageable, and having bigger social resonance than running a crypto-crusade after your own people.
R-T-BI mean I use coinbase, as do most legit traders at least stateside. I feel like other less legit exchanges can't die fast enough frankly. These shady ops need to go.
I also started with Coinbase, but outside the US it's nothing more than a fancy wallet with charts. Binance is basically a better Coinbase for the rest of the world.
Heck, I've even tried to do a small crypto withdrawal through my relatives stateside not too long ago, and the whole process was such a clusterf#$% that I was forced to do it through Binance anyways. In EU and CIS it's essentially the only reliable way to buy/sell crypto for fiat. Last months they even added support for UAH and added fiat withdrawals for Ukraine (which is more than Paypal ever did, even after direct talks with our govt.). In the essence the only difference between Coinbase and Binance is one being public and one being private. ID validation is nothing new, and nearly all exchanges do it nowadays, and nearly everywhere there are ways around it.
Plus, exchange is just a tool. Crooks will always find a way to use new tools, so nothing new, nothing surprising, and nothing to blame Binance for (exchange manipulation is a story for another day, but CB had its dirty spots there too). I'm absolutely sure that while I'm writing this post, someone somewhere on another side of the planet in total disregard of scary IRS and photo ID validation is selling adderall and oxies for crypto, cause who the hell is going to check his tax forms anyways?:pimp:
Posted on Reply
#16
R-T-B
silentbogoThat's DOJ and IRS being stupid and greedy once again. Binance explicitly does not work with US of A, so if there's a case of tax evasion or illegal activities, it's US citizens that use Binance who should be investigated. It's a simple case of going after one offshore company being a tad easier, more manageable, and having bigger social resonance than running a crypto-crusade after your own people.


I also started with Coinbase, but outside the US it's nothing more than a fancy wallet with charts. Binance is basically a better Coinbase for the rest of the world.
Heck, I've even tried to do a small crypto withdrawal through my relatives stateside not too long ago, and the whole process was such a clusterf#$% that I was forced to do it through Binance anyways. In EU and CIS it's essentially the only reliable way to buy/sell crypto for fiat. Last months they even added support for UAH and added fiat withdrawals for Ukraine (which is more than Paypal ever did, even after direct talks with our govt.). In the essence the only difference between Coinbase and Binance is one being public and one being private. ID validation is nothing new, and nearly all exchanges do it nowadays, and nearly everywhere there are ways around it.
Plus, exchange is just a tool. Crooks will always find a way to use new tools, so nothing new, nothing surprising, and nothing to blame Binance for (exchange manipulation is a story for another day, but CB had its dirty spots there too). I'm absolutely sure that while I'm writing this post, someone somewhere on another side of the planet in total disregard of scary IRS and photo ID validation is selling adderall and oxies for crypto, cause who the hell is going to check his tax forms anyways?:pimp:
That's why I prefixed my whole post with "at least stateside."

Sad you don't have more crypto options.
elghinnarisaYes, I did that years ago.
I dont know how many transactions I done on coinbase, never did have an issue. But thats generally not a good thing for me. Thats just how its supposed to be, a bare minimum. Its how a company handles fudges that really show what they are. In this case, worthless.
I'm sorry you are having issues with them. I can only say you are one of the first I've heard of outside of "typically angry" reddit. Not that that makes your issue less severe, but just saying.
PatriotPay your taxes on it and you will be fine... they just don't like being out of control.
Coinbase actually advises you how to do this. It's not hard to do with them in USA for a wallet that's just on coinbase buying/selling/trading:

www.coinbase.com/learn/tips-and-tutorials/crypto-and-bitcoin-taxes-US
Posted on Reply
#17
evernessince
silentbogoThat's DOJ and IRS being stupid and greedy once again. Binance explicitly does not work with US of A, so if there's a case of tax evasion or illegal activities, it's US citizens that use Binance who should be investigated. It's a simple case of going after one offshore company being a tad easier, more manageable, and having bigger social resonance than running a crypto-crusade after your own people.


I also started with Coinbase, but outside the US it's nothing more than a fancy wallet with charts. Binance is basically a better Coinbase for the rest of the world.
Heck, I've even tried to do a small crypto withdrawal through my relatives stateside not too long ago, and the whole process was such a clusterf#$% that I was forced to do it through Binance anyways. In EU and CIS it's essentially the only reliable way to buy/sell crypto for fiat. Last months they even added support for UAH and added fiat withdrawals for Ukraine (which is more than Paypal ever did, even after direct talks with our govt.). In the essence the only difference between Coinbase and Binance is one being public and one being private. ID validation is nothing new, and nearly all exchanges do it nowadays, and nearly everywhere there are ways around it.
Plus, exchange is just a tool. Crooks will always find a way to use new tools, so nothing new, nothing surprising, and nothing to blame Binance for (exchange manipulation is a story for another day, but CB had its dirty spots there too). I'm absolutely sure that while I'm writing this post, someone somewhere on another side of the planet in total disregard of scary IRS and photo ID validation is selling adderall and oxies for crypto, cause who the hell is going to check his tax forms anyways?:pimp:
Maybe but I'd wait until more details come to light before coming to a conclusion.
Posted on Reply
#18
Tardian
silentbogoThat's DOJ and IRS being stupid and greedy once again. Binance explicitly does not work with US of A, so if there's a case of tax evasion or illegal activities, it's US citizens that use Binance who should be investigated. It's a simple case of going after one offshore company being a tad easier, more manageable, and having bigger social resonance than running a crypto-crusade after your own people.


I also started with Coinbase, but outside the US it's nothing more than a fancy wallet with charts. Binance is basically a better Coinbase for the rest of the world.
Heck, I've even tried to do a small crypto withdrawal through my relatives stateside not too long ago, and the whole process was such a clusterf#$% that I was forced to do it through Binance anyways. In EU and CIS it's essentially the only reliable way to buy/sell crypto for fiat. Last months they even added support for UAH and added fiat withdrawals for Ukraine (which is more than Paypal ever did, even after direct talks with our govt.). In the essence the only difference between Coinbase and Binance is one being public and one being private. ID validation is nothing new, and nearly all exchanges do it nowadays, and nearly everywhere there are ways around it.
Plus, exchange is just a tool. Crooks will always find a way to use new tools, so nothing new, nothing surprising, and nothing to blame Binance for (exchange manipulation is a story for another day, but CB had its dirty spots there too). I'm absolutely sure that while I'm writing this post, someone somewhere on another side of the planet in total disregard of scary IRS and photo ID validation is selling adderall and oxies for crypto, cause who the hell is going to check his tax forms anyways?:pimp:
Personally, I think making negative comments about the DOJ and IRS is stupid. Money laundering is illegal in most countries of the world. Large government organisations are not always quick to respond to the latest threat, but when they do watch out! Whilst I agree that 'Crooks will always find a way to use new tools' EVERY financial institution conventional or Crypto has an obligation for ensure it is NOT fostering money laundering.
Posted on Reply
#19
R-T-B
TardianMoney laundering is illegal in most countries of the world.
The issue isn't the charges, it's the jurisdiction dude.

How can they be complicit in US money laundering when they won't even let a USA citizen have an account?

Short, logical answer is: unless they are doing something outside what their website is showing (like, in person), they can't.

Also, the definition of what constitutes "money laundering" very much differs in different legal zones. The US must prove that harm was done to their citizens by the exchange knowingly to their legal definition of "money laundering" in order to proceed with a case like this.

Given what I know, I doubt that will happen.
Posted on Reply
#20
Tardian
R-T-BThe issue isn't the charges, it's the jurisdiction dude.

How can they be complicit in US money laundering when they won't even let a USA citizen have an account?

Short, logical answer is: unless they are doing something outside what their website is showing (like, in person), they can't.

Also, the definition of what constitutes "money laundering" very much differs in different legal zones. The US must prove that harm was done to their citizens by the exchange knowingly to their legal definition of "money laundering" in order to proceed with a case like this.

Given what I know, I doubt that will happen.
Answer: Very easily. The DOJ and IRS do not have unlimited resources or budget. I would guess if they are involved it is because there is really obvious USA juridiction issue. BTW criminals are well known for following rules. Tax evasion involves fraud and false and/or misleading statements/arrangements and behaviour. Should you want to disagree, in my next comment I will point out how heinous is the business of the criminals who are laundering money.
Posted on Reply
#21
R-T-B
Tardianin my next comment I will point out how heinous is the business of the criminals who are laundering money.
Oh my, scary.

No need we are all aware of all the things you can come up with. If there's a crime it's been committed, don't strain your imagination as it's well established without your fun elaborate and completely unnecessary details.

What the US has to demonstrate is that binance knowingly engaged with US money launderers. Since they don't even let US citizens have accounts I am curious how you will explain that one... I'm guessing it will be something along the lines of "blind eye to VPN users" or something similar. In which case, that better be a crime in the island their incorporated in. Even if it is, you now need to show how they could've made a better effort to detect VPNs, and furthermore were knowingly or negligently letting US citizens register. We'll see how the case plays out, but I see this as a scare tactic against crypto more than a serious case. This would be a real hard one to prosecute.

Just FYI, I use crypto and am not a sicko / war criminal / whatever it is you are surely typing up now. We exist.
TardianBTW criminals are well known for following rules.
Criminals are also innocent until proven guilty, ie binance are not criminals yet. They may never be, we'll see what happens.
RaevenlordAccording to Chainalysis.inc, a company specializing in scrutinizing the crypto market and its players, Binance was the principal crypto exchange through where funds derived from illegal activities went. According to the company, the amount of money attributed to illegal activities isn't low either; Chainalysis estimated Binance was the gateway of choice for moving upwards of $756 million dollars in illegal activities, a tidy percentage of its 2.8 billion dollar flux in that same year. No formal investigation has been announced yet, but this could be the prelude to a deeper dive onto the company's finances and possible enablement of criminal activity.
Actually, I may have to recant a bit.

If crimes commited on US soil were directly "banked out" via known criminal wallets to binance, there could be valid charges. I swear this fairly damning detail wasn't there when I read this before...

Interesting indeed. They are in very hot water if provable. I'm keeping my old reply, before I was aware of this detail, up but striked out because I no longer support that argument given this detail, but don't want to deny I wrote it either.
Posted on Reply
#22
Caring1
Lucky the U.S. has the power to do something outside their jurisdiction, oh wait ....
Posted on Reply
#23
Tardian
I don't believe at any time I suggested that all users of Cyrptocurrency were criminals or tax cheats. I believe that given the widespread press coverage, and DOJ and IRS interest that some (not all) users of Cyrptocurrency are criminals or tax cheats. Apologies if others have inferred something that was not implied.
Posted on Reply
#24
R-T-B
TardianI don't believe at any time I suggested that all users of Cyrptocurrency were criminals or tax cheats. I believe that given the widespread press coverage, and DOJ and IRS interest that some (not all) users of Cyrptocurrency are criminals or tax cheats. Apologies if others have inferred something that was not implied.
Appreciated. I misread you, pretty sure.
Caring1Lucky the U.S. has the power to do something outside their jurisdiction, oh wait ....
They do if they can prove the group was complicit in a crime on their shores, see above. INTERPOL and extradition, all that jazz.
Posted on Reply
#25
mechtech
For some reason I had a flash back to the movie untouchables. Not-guilty on everything.......................except tax evasion.................
Posted on Reply
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