Bifinity UAB Emerges as Top Taxpayer: Binance’s Lithuanian Unit Contributes $45 Million in 2022
Bifinity UAB, the crypto-to-fiat processing unit of global cryptocurrency exchange Binance, has shot up the ranks to become one of Lithuania’s top taxpayers within just one year of its establishment. According to recent data published by the pseudonymous blockchain researcher known as DeFi Ignas (@DefiIgnas on X), Bifinity UAB contributed over $45 million in taxes, excluding Value Added Tax (VAT), to the Lithuanian government in 2022.
During the 2022 fiscal year, Binance’s affiliate, Bifinity, not only secured the position of the second-largest corporate taxpayer but also ranked as the fourth-largest taxpayer overall within Lithuania, a Baltic nation known for its embrace of cryptocurrency and blockchain technology.
DeFi Ignas took to Twitter to highlight this astonishing development, stating, “There’s one peculiar reason I’m a fan of Binance. Binance via Bifinity entity contributed more in taxes in my small home country Lithuania than the four largest Nordic banks. Binance funds fixing our terrible roads and supporting our welfare state.”
There’s one peculiar reason I’m a fan of Binance.
Binance via Bifinity entity contributed more in taxes in my small home country Lithuania than the four largest Nordic banks.
In fact, Binance was the 2nd largest corporate and 4th largest taxpayer overall. Binance funds fixing… pic.twitter.com/TJ9UfHsXWm
— Ignas | DeFi Research (@DefiIgnas) September 7, 2023
The choice of Lithuania as the base for Bifinity is intriguing, as it provides access to the European Union and accommodates Binance’s financial operations. Forbes previously reported that Binance turned to Lithuania after encountering difficulties securing a crypto license in both Malta and London.
However, not everything is rosy for Binance and its Lithuanian subsidiary. The exchange is currently embroiled in several lawsuits, which they vehemently deny. Bifinity is specifically accused of facilitating “dubious transactions” for Binance, with $6.3 billion reportedly being sent to Merit Peak, another Binance subsidiary currently under scrutiny by the U.S. Securities and Exchange Commission (SEC) for alleged mingling of customer funds. Additionally, it has come to light that Bifinity was used to purchase a $55 million private jet and directed $62.5 million to the personal account of Binance CEO Changpeng Zhao (CZ).
These developments have raised questions about why Binance chose Lithuania, a country with perceived “weaker standards,” as its base of operations. Critics, including an advisor to the European Central Bank (ECB), have asked why Binance couldn’t secure regulatory approval elsewhere if it is indeed a reputable company.
However, in the current climate of regulatory uncertainty surrounding cryptocurrencies, such criticisms may seem unjust to many crypto advocates. Cryptocurrency’s blessing to smaller nations that embrace it is increasingly evident, and Lithuania appears to be one such beneficiary.
Lithuanian legal experts and observers seem unfazed by the allegations against Bifinity and Binance, expressing optimism that the “FUD” (Fear, Uncertainty, Doubt) surrounding the exchange will eventually dissipate, much like recent cases involving Ripple and Grayscale against the SEC. Vytautas from the “Crypto Economy Organisation” echoed this sentiment, stating, “No accusation has been proven; there are only assumptions. The U.S. makes accusations against many. This is the American model where the regulator accuses everyone of something, then fails to prove it and backs off. I think the same will happen with Binance, as there is no evidence so far, and from what we see in the market, there are hardly any indications that any violations have been committed.”
Despite the controversies, the presence of Binance and its subsidiary, Bifinity, in Lithuania is undoubtedly a boon for the nation. Many hope that more cryptocurrency companies will follow suit, potentially helping to address pressing issues such as the country’s crumbling infrastructure and underfunded educational institutions.
Bifinity, launched on March 7, 2022, as Binance’s proprietary payments technology company, plays a crucial role in facilitating crypto-to-fiat transactions, powering the payments API, and offering compatibility with Visa and Mastercard operators. Its rapid ascent to the upper echelons of Lithuania’s taxpayer rankings is a testament to the growing significance of the cryptocurrency industry in the global financial landscape.
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