US investigators are looking into Binance’s dealings with hedge funds in the country and any potential breaches of money laundering laws.
The US Attorney’s Office for the Western District of Washington in Seattle has been sending subpoenas to various hedge funds based in the country, looking to examine how Binance has been moving its finances, and whether there have been breaches of money laundering regulation.
A report by the Washington Post explained the investigation seeks to establish a connection between hedge funds based in the country and the crypto exchange.
Investigators are interested in communication between the hedge funds and Binance, according to two Washington Post sources familiar with the matter.
The move follows the routing of FTX, a rival exchange that Binance refused to bail out because of the reckless way the company spent and squandered its investors’ money.
Now, regulators are taking a closer look at all variables and Binance is one of those.
The implosion of FTX has given regulators chills and many have rushed to prevent a similar debacle.
While the impact of FTX was not felt across the economy, it certainly wrote off a lot of value.
In the meantime, the report argues that the US may not be looking to bring charges against Binance. If wrongdoing is established, investigators may seek to settle with the company, perhaps fearing a further meltdown in the market, or finding the potential offenses not damning enough to merit a full trial.
Recently, the US Securities and Exchange Commission objected to a bid Binance placed for Voyager Detail, another beleaguered crypto company.
However, Binance has been associated with questionable practices. Reuters reported the company has become a “hotspot” for hackers, fraudsters, and drug traffickers.
These allegations have been floated publicly, but no official response has come from the likes of the Department of Justice just yet.
On another occasion, Reuters confirmed that its sources had informed it about a potential breach of US-led sanctions against Iran, and that Binance has processed transactions in crypto despite the sanctions.
The latest report is concerning but it’s unlikely to trigger any serious legal proceedings against Binance in full.
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