Binance, one of the world’s largest cryptocurrency exchanges, does not report to tax authorities, according to a person familiar with the matter.
The revelation raises questions about the transparency of the billion-dollar company, which is headquartered in Malta but has significant operations in Hong Kong.
It also highlights the challenges regulators face in trying to bring cryptocurrency trading into the mainstream.
Binance was founded in 2017 by Changpeng Zhao, a former trader at Wall Street firm Merrill Lynch. It has grown rapidly to become one of the most popular cryptocurrency exchanges, with a 24-hour trading volume of more than $1 billion.
The company has been largely unregulated and has faced criticism for lax anti-money laundering controls. In March, Japanese regulators ordered Binance to stop operating in the country after it failed to register with authorities.
Binance is not required to disclose its financial information because it is not listed on a stock exchange. But the person familiar with the matter said the company does not provide information about its customers or their trading activity to any government or tax authority.
The person spoke on the condition of anonymity because they were not authorized to speak publicly about the matter.
A Binance spokeswoman declined to comment.
It is unclear how much tax revenue Binance generates or where it is generated. The company does not have a public presence in Malta, where it is headquartered, and its customer service representatives are located in Asia.
Binance’s website says it “plans to use Malta as a base for its expansion into Europe” but does not provide any details about its operations there. A Maltese government spokesman declined to comment.