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

Article - Media, Publications

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

Tom Schoenberg, 13 May 2021

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. Continue reading “Article: Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths”

Article: Token deal drama between Alameda, Reef Finance breaks into public view

Article - Media, Publications

Token deal drama between Alameda, Reef Finance breaks into public view

Yogita Khatri, 16 March 2021

A recent token deal between crypto firms Alameda Research and Reef Finance quickly turned into an ugly — and public — fight on Monday.

Both parties started slinging mud at each other, alleging that the other party was in the wrong. It all started with Alameda Research buying, or “investing,” $20 million in Reef Finance by buying the DeFi project’s REEF tokens for that amount. Alameda bought the tokens at a 20% discount.

Three days after Reef Finance announced the investment, Alameda’s trader Sam Trabucco tweeted that the market maker is not affiliated with Reef and that it does not recommend anyone to do business with Reef in any way.

“We agreed to an OTC [over-the-counter] trade with REEF; they immediately went to the press to brag. They then reneged on the OTC trade,” said Trabucco. Alameda had wanted to buy more REEF tokens, but for some reason, Reef backed out.

As The Block reported last week, Alameda wanted to buy a further $60 million worth of REEF tokens. But the deal has now been canceled.

So what went wrong? Based on the information that became public, it appears that a mix of competing incentives and the reliance on what Alameda called a “handshake deal” — that is, a verbal commitment to a transaction conducted via Telegram — are to blame.

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