Warning On Binance For U.S. Money-Laundering and Tax Avoidance

Bitcoin problem with Binance

If you have been using Binance to do cryptocurrency trading, you need to know this news released on 13 May 2021.  Personally I used Binance to trade Bitcoin since last year and I really like the liquidity there.  But after this news, I had started to reduce my positions over the weekend and will continue to assess the situation.

At least until the dust settled down.  I will leave it to your assessment if you have the same concern.

What Is Binance About?

As of April 2021, Binance was the largest cryptocurrency exchange in the world in terms of trading volume.  It was founded in 2017 by Changpeng Zhao and Yi He (both from China).  It provides a platform for trading more than 500 cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), and its own token Binance Coin (BNB). Binance also provides a crypto wallet for its traders, where they can store their electronic funds.

The firm, like the industry it operates in, has succeeded largely outside the scope of government oversight.  It is incorporated in the Cayman Islands and has an office in Singapore but it lacks a single corporate headquarters.

What Happen At Binance On 13 May 2021?

You can get the details at the following links:

1. Forbes Report: U.S. Officials Investigating Crypto Exchange Binance Amid Market’s Massive Boom

2. Bloomberg: Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths

In summary last week, the US Department of Justice (DOJ) and Internal Revenue Service (IRS) had reportedly opened an investigation into cryptocurrency exchange Binance.

There is no confirmation on the details but the report states that prosecutors within the DOJ’s bank integrity unit, charged with complex, international cases involving money laundering, are at least partly leading the inquiry. Bloomberg notes that more illicit funds flowed through Binance last year than any other crypto exchange.

What Actions I Am Taking

I understand this is still at investigation stage only but I rather be on the safe side.  Hence, I am taking more prudent positions to protect my portfolio.  I am moving my cryptocurrency off the Binance wallet (at least) for the moment.

The other alternative cryptocurrency exchanges that I am exploring includes:

1. Gemini for large Cryptos Portfolio

2. Coinbase for small Cryptos Portfolio

If you are doing the same, please do check with the cryptocurrency exchanges for the details on how to do the transfer, the altcoins available, how to do fund deposit and withdrawal and much more before you go over.

Trade safe!

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