US prosecutors seek information from hedge funds in Binance probe

The United States prosecutors are conducting an investigation into whether hedge funds have engaged in money laundering violations through their relationships with the cryptocurrency exchange Binance.


Binance is a cryptocurrency exchange that was founded in 2017. It is a platform that allows users to buy, sell, and trade a wide range of digital assets, including cryptocurrencies such as Bitcoin, Ethereum, and Binance Coin.

Binance has become one of the largest and most popular cryptocurrency exchanges in the world, with a wide user base and a strong reputation for security. In addition to its core exchange business, Binance also offers a number of other related products and services, such as a digital wallet and a platform for initial coin offerings (ICOs).

Anonymous sources told the Washington Post that the U.S. attorney’s office for the Western District of Washington in Seattle has subpoenaed investment firms for records of their communications with Binance in recent months as part of an investigation.

Legal specialists have indicated that the issuance of subpoenas does not necessarily mean that prosecutors are planning to bring charges against either the cryptocurrency exchange or the hedge funds. Rather, they are reportedly still in the process of evaluating evidence and considering the possibility of reaching a settlement with Binance.

Binance has been the subject of a probe by United States authorities since 2018, when prosecutors first began to examine a series of cases involving the alleged transfer of illegal funds through the exchange. The investigation is focused on potential violations including unlicensed money transmission, conspiracy to launder money, and violations of criminal sanctions.

Under the Bank Secrecy Act, cryptocurrency exchanges that conduct a “substantial” amount of business in the United States are required to register with the Treasury Department and adhere to anti-money laundering regulations.

Binance is infamous for not having an official headquarters and using an intricate web of offshore entities to optimize its operations and evade too much oversight by regulatory bodies.

In an effort to ensure compliance with global sanctions, Binance has become a member of the Association of Certified Sanctions Specialists (ACSS). On January 6, the cryptocurrency exchange announced that its sanctions compliance team would participate in certification training through ACSS.

After facing criticism for operating without regulation, Binance recently joined the Chamber of Digital Commerce, a cryptocurrency lobbying group based in the United States. The group advocates for a range of public policy issues, including tax parity for digital assets, Anti-Money Laundering/Know Your Customer regulations for cryptocurrency exchanges, greater regulatory clarity for security tokens, and research on central bank digital currencies.

Binance remained silent on the matter of the ongoing investigation and did not immediately respond to any requests for comments.