• US authorities haven’t accused Binance of any criminal wrongdoing, but seek information
  • Some users have complained that their accounts have been locked for weeks

The world’s biggest digital assets exchange is facing questions from the US Department of Justice and the IRS, but the nature of the inquiry is not yet criminal, according to a report from Bloomberg

Reports say that Justice Department officials which usually probe money laundering and tax offenses have been called in to investigate. All this comes after energy infrastructure company Colonial Pipeline is said to have paid ransomware hackers $5 million in bitcoin to free their company workstations from the encrypted grip of ransomware. 

In its report Bloomberg noted that forensic work done by Chainalysis has concluded “more funds tied to criminal activity flowed through Binance than any other crypto exchange.”   

Binance had been in the spotlight earlier this week as it temporarily suspended withdrawals for some, citing technical challenges. However, a report from CoinDesk claims that users from the US — which the exchange technically forbids but often turns a blind eye through the use of VPNs — have had their accounts locked for months, even as they were undertaking a Binance-sanctioned plan to move assets to the regulatory-compliant Binance.US 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 a published 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.”

In March, the exchange faced a probe by the Commodity Futures Trading Commission with regards to the presence of US-based traders on its platform.

The price of BNB, Binance’s exchange token, is down nearly 5% in the last hour and 15% in the last 24 hours, according to CoinGecko.  

  • Blockworks
    Sam Reynolds is a Taipei-based reporter, covering digital assets and regulation throughout Asia. Before joining Blockworks he was an editor at Forkast News and an analyst with IDC.