Federal prosecutors have reportedly issued subpoenas to several U.S. hedge funds that have dealt with the world’s largest cryptocurrency exchange, Binance Global Inc., as part of a years-long probe into possible money-laundering rules violations, the Washington Post reported.
See related article: U.S. Justice Department mulls charging Binance over potential money laundering violations: report
Fast facts
- According to the Washington Post’s two unnamed sources familiar with the matter, The U.S. attorney’s office for the Western District of Washington in Seattle is reportedly seeking records of the subpoenaed firms’ communications with Binance.
- As of December last year, the U.S. Justice Department was split on whether to charge Binance and its executives in its anti-money laundering investigation into the company.
- The subpoenas would not necessarily result in legal charges being brought against Binance, according to the report.
- Binance chief strategy officer Patrick Hillmann told the Washington Post that the company is talking to “virtually every regulator across the globe on a daily basis,” but declined to comment on the status of the investigation.
- Ex-prosecutor John Ghose told the Washington Post, the Justice Department may be examining whether Binance violated the Bank Secrecy Act, which requires financial institutions to conduct proper know-your-customer protocols and report suspicious activities on their platforms.
- Scrutiny of the crypto industry has increased significantly following the multibillion-dollar collapse of the Bahamas-based crypto exchange, FTX.com.
- The U.S. Securities and Exchange Commission objected last week to Binance’s U.S. arm’s proposed US$1 billion purchase of bankrupt crypto lender Voyager Digital’s assets, saying the purchase agreement lacked sufficient details of Binance’s ability to close the deal.
See related article: SEC objects to Binance’s US$1 bln deal to buy Voyager Digital’s assets