U.S. Prosecutors Investigating Binance and Hedge Funds for Money Laundering
• US prosecutors are investigating hedge funds’ relationships with cryptocurrency exchange Binance as part of a money laundering investigation.
• The US attorney’s office for the Western District of Washington in Seattle reportedly subpoenaed investment firms to provide records of their communications with Binance in the past months.
• Binance has been under investigation in the US since 2018, when prosecutors began examining a number of cases of illicit funds moving through the exchange.
The US Department of Justice is reportedly conducting an investigation into cryptocurrency exchange Binance and its connections with hedge funds. According to anonymous sources cited by the Washington Post, the US attorney’s office for the Western District of Washington in Seattle has issued subpoenas to investment firms, requesting records of their communications with Binance in the past months.
The investigation is part of a wider effort to crack down on money laundering and other financial crimes. Binance has been under scrutiny since 2018, when prosecutors began examining a number of cases of illicit funds moving through the exchange. Alleged violations include unlicensed money transmission, money laundering conspiracy and criminal sanctions violations.
Under the Bank Secrecy Act, crypto exchanges that conduct “substantial” business in the United States are required to register with the Treasury Department and comply with Anti-Money Laundering regulations. Binance’s chief strategy officer Patrick Hillmann acknowledged to the Washington Post that the company had a poor approach to regulatory compliance in its early days, though he noted that the exchange has since made efforts to improve its compliance with the law.
The US Department of Justice has yet to file any charges against Binance or the hedge funds involved in the investigation, as authorities are still evaluating evidence and a possible settlement with the exchange. It remains to be seen what kind of outcome the investigation will have and whether or not Binance or any of its associated parties will be found guilty of any wrongdoing.
In the meantime, the crypto community is awaiting the results of the investigation with bated breath. For many, this could be a significant moment for the industry, as it may set a precedent for other exchanges that are operating in the US without following the appropriate regulations.