Binance Faces Probe By US Money-Laundering and Tax Sleuths (bloomberg.com) 15
An anonymous reader quotes a report from Bloomberg: Binance Holdings Ltd. is under investigation by the Justice Department and Internal Revenue Service, ensnaring the world's biggest cryptocurrency exchange in U.S. efforts to root out illicit activity that's thrived in the red-hot but mostly unregulated market. As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance's business, according to people with knowledge of the matter who asked not to be named because the probe is confidential. Led by Changpeng Zhao, a charismatic tech executive who relishes promoting tokens on Twitter and in media interviews, Binance has leap-frogged rivals since he co-founded it in 2017.
The firm, like the industry it operates in, has succeeded largely outside the scope of government oversight. Binance is incorporated in the Cayman Islands and has an office in Singapore but says it lacks a single corporate headquarters. Chainalysis Inc., 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. [...] While the Justice Department and IRS probe potential criminal violations, the specifics of what the agencies are examining couldn't be determined, and not all inquiries lead to allegations of wrongdoing. The officials involved include prosecutors within the Justice Department's bank integrity unit, which probes complex cases targeting financial firms, and investigators from the U.S. Attorney's Office in Seattle. The scrutiny by IRS agents goes back months, with their questions signaling that they're reviewing both the conduct of Binance's customers and its employees, another person said.
The U.S. Commodity Futures Trading Commission has also been investigating Binance over whether it permitted Americans to make illegal trades, Bloomberg reported in March. In that case, authorities have been examining whether Binance let investors buy derivatives that are linked to digital tokens. U.S. residents are barred from purchasing such products unless the firms offering them are registered with the CFTC. [...] Along with the CFTC, the Justice Department is likely to examine steps that Binance has taken to keep U.S. residents off its exchange. One person familiar with Binance's operations said that prior to the establishment of Binance.US, Americans were advised to use a virtual proxy network, or VPN, to disguise their locations when seeking to access the exchange. "We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion," Binance spokeswoman Jessica Jung said in an emailed statement. "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."
The firm, like the industry it operates in, has succeeded largely outside the scope of government oversight. Binance is incorporated in the Cayman Islands and has an office in Singapore but says it lacks a single corporate headquarters. Chainalysis Inc., 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. [...] While the Justice Department and IRS probe potential criminal violations, the specifics of what the agencies are examining couldn't be determined, and not all inquiries lead to allegations of wrongdoing. The officials involved include prosecutors within the Justice Department's bank integrity unit, which probes complex cases targeting financial firms, and investigators from the U.S. Attorney's Office in Seattle. The scrutiny by IRS agents goes back months, with their questions signaling that they're reviewing both the conduct of Binance's customers and its employees, another person said.
The U.S. Commodity Futures Trading Commission has also been investigating Binance over whether it permitted Americans to make illegal trades, Bloomberg reported in March. In that case, authorities have been examining whether Binance let investors buy derivatives that are linked to digital tokens. U.S. residents are barred from purchasing such products unless the firms offering them are registered with the CFTC. [...] Along with the CFTC, the Justice Department is likely to examine steps that Binance has taken to keep U.S. residents off its exchange. One person familiar with Binance's operations said that prior to the establishment of Binance.US, Americans were advised to use a virtual proxy network, or VPN, to disguise their locations when seeking to access the exchange. "We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion," Binance spokeswoman Jessica Jung said in an emailed statement. "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."
Crackdown due to Colonial hack? (Score:2, Insightful)
The Colonial pipeline hack has highlighted the danger of cryptocurrencies - without them, ransomware would be somewhere between impossible and wildly impractical. Was it before or after the hack that Tesla decided to bail on their plan to sell cars for Bitcoins? And now this. Hopefully we're seeing a #suddenoutbreakofcommonsense, it's a sham for anti-money-laundering rules to exist in a world that legally allows cryptocurrencies to be traded.
Re: (Score:2)
Bitcoin's value will crash, allowing people to buy a lot of them. Then Bitcoin will switch from proof-of-work to something else that's a lot greener, and its value will shoot back up once again.
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Problem is that AFAIK the only alternative to proof-of-work for a real-deal cryptocurrency is proof-of-stake, which bakes "the rich get richer" into the currency itself and is still far less efficient than traditional payment systems, even if it's not anti-efficient like proof-of-work.
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Proof-of-stake is an interesting topic. The incentives for all the participants is to compute the most advantageous chain for themselves, because it costs nothing to do so.
At this stage, real world implementations rely on a node that is more equal than the others to generate the valid state. Anyway, these projects are managed by real con-artists. This is not a problem for them to sell the product for something that is impossible to achieve.
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Yeah blame crypto for people leaving TeamViewer running on critical infrastructure.
Re: Crackdown due to Colonial hack? (Score:3)
Before cryptocurrencies, the only things you could do after logging into that TeamViewer were to straight-up destroy the system through wanton vandalism, gather information to perform identity theft/fraudulent transactions, use their system resources for other cybercrime infrastructure, or perhaps take info for some kind of political hacktivism. I will blame cryptocurrency for the ransomware phenomenon.
What about Science, Engineering, Technology news. (Score:2)
Is it just because a business now has a website and a mobile app it is now considered tech news.
They are a lot of crappy companies doing crappy stuff. Report that on business news websites
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At least this is an actual development that might have an impact on a (formerly) nerdy topic. The average cryptocurrency article here is along the lines of "Bitcoin declines 10% on Tuesday after spiking 10% Sunday". Been on repeat weekly for about 4 months now. If we could get rid of stuff like that and "Musk on SNL!" maybe there would be room for hard tech news here again.
Then again, didn't we have regular updates on every minute turn of the SCO lawsuit?
Stickittotheman (Score:4, Insightful)
Binance is incorporated in the Cayman Islands and has an office in Singapore but says it lacks a single corporate headquarters.
Totally not tax evasion. Definitely not money laundering. The only stickittotheman going on here is the healthy & hip kind.
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In other news, TIME magazine is now accepting payment in cybercryptos. Find out more at http://time.com/HODL [time.com] (No, seriously.)
Tipped off (Score:2)
Still a drop in the bucket (Score:2, Interesting)
more funds tied to criminal activity flowed through Binance than any other crypto exchange.
Still a drop in the bucket compared to the money laundering operations of the megabanks like CitiCorp and Chase. I suspect it's considerably easier to track Bitcoin transactions than try to follow a money trail through the Cayman Islands, Panama, Lichtenstein, Singapore, and Vanuatu. The cost per transaction is about the same, but the megabanks only deal with large scale customers like the Sinaloa Cartel or RJR Tobacco. Ransomware schemes are too penny-ante for serious consideration by most of the banks.
Re: Still a drop in the bucket (Score:1)
:) LOL So true
It's not like the word "ransom" was any less popular before bitcoins.
Or even that BTC is the most preferred ransom / bribe currency.
But the idiot troll armies will keep shouting rabidly against whatever is the flavor of the day without trying to understand or get a balanced perspective.