Binance, the world’s largest crypto exchange, is reportedly being investigated by federal prosecutors, which has led to multiple American hedge funds being subpoenaed by the Western District of Washington in Seattle.
According to a report from the Washington Post, investment firms in the US have been directed by prosecutors to hand over records of their communications with Binance.
The Washington Post cites two people who reviewed the subpoenas and spoke on the condition of anonymity.
Binance chief strategy officer Patrick Hillmann told Washington Post that the exchange is talking to “virtually every regulator across the globe on a daily basis,” but declined to make specific comments.
John Ghose, a former Justice Department prosecutor who specialized in cases involving digital assets, told the Washington Post that he believes prosecutors are looking at whether Binance violated the Bank Secrecy Act, which requires financial institutions to verify the identities of their clients and flag suspicious activity.
Ghose also said that the subpoenas could suggest that investigators are looking into Binance’s relationship with US investors, though the former prosecutor doesn’t have firsthand knowledge of the situation.
“The basis of those charges is whether there are US customers… If there are US customers, there are charges for avoiding the money laundering requirements.”
The head of one of the hedge funds based in New York with $2.5 billion in assets under management told the Washington Post that his firm trades on Binance through corporate entities outside the United States.
The fund manager reportedly said that even though Binance prohibits US citizens from its platform, “corporations and citizens are very different.”
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- Source: https://dailyhodl.com/2023/01/09/us-hedge-funds-receive-subpoenas-over-communications-with-binance-as-investigators-probe-crypto-exchange-report/