U.S. hedge funds are being subpoenaed to hand over information of its dealings with cryptocurrency platform Binance as part of a federal investigation into potential money-laundering breaches at the crypto company, the Washington Post reported over the weekend.
The U.S. attorney’s office for the Western District of Washington has sent subpoenas in the last few months to hedge funds demanding all communications with Binance, citing two sources familiar with the subpoenas.
Authorities have not brought charges against Binance, founder Changpeng “CZ” Zhao or other executives. Last month, Reuters reported that prosecutors were weighing up whether to bring indictments against Binance or agree to a settlement.
The federal probe comes at a critical moment for the crypto industry, which is facing intense reputational scrutiny in the wake of the FTX implosion sending cryptocurrency values slumping.
The criminal investigation began in 2018, and is looking into Binance’s compliance with U.S. anti-money laundering laws, Reuters has reported.
The crypto platform has long since frustrated financial authorities for allowing users to trade crypto coins without identification, allegedly making it a haven for money-laundering, according to John Ghose, a former Justice Department prosecutor quoted by the Post.
He told the Post that Binance “did not have a reputation of being a responsible exchange”.
Compliance spree
Binance has made recent pledges step up on compliance. On Friday, the company announced it had joined the Association of Certified Sanctions Specialists (ACSS), an organization that joins together sanctions compliance professionals.
In 2022, it also went on a hiring spree to grow its compliance team from 500 to 750 members, the company said.
It also tapped up ex-U.S. senator Max Baucus to chair a global advisory board in an effort to improve relations with Washington. Binance also recently joined crypto lobbying association the Chamber of Digital Commerce.
Binance did not respond immediately to MarketWatch’s request for comment.
Read: Crypto brokerage Genesis lays off 30% of its staff in an effort to survive
Add Comment