IRS and Justice Department are investigating Binance

Binance, one of the well-known cryptocurrency exchanges, is under investigation by the IRS and the Justice Department after a drop in the price of major cryptocurrencies.

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The first and second cryptocurrencies by market cap, Bitcoin and Ethereum (BTC and ETH) experienced a fall of 3 and 5 percent respectively. In the wake of these drops, the US department of justice and the Internal Revenue Service (IRS) are looking into Binance Exchange in what seems to be a measure being taken to impede users in the US to do any sort of trading activity.

The main purpose behind these investigations by the IRS and the Department of justice is to find out if any US residents are using cryptocurrencies for illegitimate transactions. To this end, they are talking to Binance staff and customers to get the required information. It must be said that not all investigations are conducted on the grounds of illicit activities.

This inquiry was confidential by nature, so it was carried out in an anonymous fashion as requested by the sources.

Binance is collaborating with the law enforcers, investigators, and regulators according to its speaker and in the same regard, Binance CEO Changpeng Zhao or CZ said they are working with the law enforcers “to fight the bad players” which puts them away from the spotlight as the wrongdoers.

Binance had been under scrutiny by the Commodity Futures Trading Commission earlier in March. The law enforcers have continuously been looking into the matter that whether any Binance users residing in the US have used this platform for trading derivatives. Simultaneously, a report was published by CZ denying any sort of allegations against themselves.

This incident had its ramifications for the market. Once this report appeared in the news, Bitcoin saw a 3.8% drop in its value from $50,270 to $48,336 while ETH and BNB dropped even more significantly, 5% from $3,854 to $3,661 and 10% from $602 to $542, respectively.

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