US Prosecutors Subpoena Hedge Funds Linked to Crypto Exchange Binance

UTC by Bhushan Akolkar · 2 min read
US Prosecutors Subpoena Hedge Funds Linked to Crypto Exchange Binance
Photo: Web Summit / Flickr

The US attorney’s office for the Western District of Washington in Seattle has subpoenaed a few investment firms asking them to provide records of their communications with Binance over the past few months.

As per the latest reports, US prosecutors are now investigating hedge funds having links to Binance as part of the ongoing money-laundering probe of the crypto exchange. Following the collapse of the crypto exchange FTX, Binance has come under the scrutiny of US regulators.

US Prosecutors Investigating Binance

Some lawmakers were also mulling the possibility of criminal charges over concerns about money laundering. In the latest report from Washington Post, an anonymous source said the US attorney’s office for the Western District of Washington in Seattle has subpoenaed a few investment firms asking them to provide records of their communications with Binance over the past few months.

These subpoenas, however, do not mean that prosecutors are bringing charges against the crypto hedge fund. Some legal specialists said that the authorities are still evaluating evidence and a possible settlement with Binance.

As per the Reuters report last month, prosecutors are considering a possible settlement with Binance. Besides, they are also weighing whether they have enough evidence to bring indictments against the company.

Binance chief strategy officer Patrick Hillmann said that they are talking to “virtually every regulator across the globe on a daily basis”. However, he’s declined to comment on any development of the US investigation.

Federal Probe Into Binance

This federal probe into crypto exchange Binance is coming at a time of major uncertainty in the crypto space. The implosion of crypto exchange FTX has spread like a contagion and left its scars across the crypto space.

As a result, investor confidence in centralized exchanges has been on a major decline. Existing players like Coinbase and Binance are facing the heat of this. On the other hand, regulators are worried about the freewheeling effect in largely unregulated crypto space and online marketplaces that trade digital assets.

Since the implosion of crypto exchange FTX, Binance chief Changpeng Zhao has been piling on to the criticism. Furthermore, he has also welcomed the regulatory attention that has followed. “Regulators rightfully will scrutinize this industry much, much harder, which is probably a good thing,” he said.

Charges on Binance for money laundering date back to 2018. John Ghose, a former Justice Department said that Binance has allowed its users to trade crypto without identifying themselves and making it easy for people to launder money. the crypto exchange has for long frustrated financial regulators and legal experts.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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