Federal Prosecutors Subpoena Hedge Funds Over Binance

Federal prosecutors are investigating the largest crypto exchange Binance and have subpoenaed several hedge funds as part of its investigation, according to a Washington Post report.

Seattle’s US attorney’s office reportedly sent subpoenas to investment firms interacting with Binance. According to the report, the hedge funds were required to provide records of their communication with the exchange.

The report noted that the subpoenas do not necessarily mean the authorities want to pursue any charges against the exchange; however, it is a sign of federal interest in the firm’s operations.

Binance Operations Draw Regulatory Interest

Binance’s operations have increasingly drawn regulatory interest amid the recent events in the crypto space.

In December, reports emerged that US Department of Justice officials considered prosecuting Binance. The report noted that the officials were divided on the course of action to take against the exchange.

Meanwhile, another report stated that drug cartels used the Changpeng Zhao-led exchange to launder millions of illegal proceeds.

According to the Washington Post report, Binance’s chief strategy officer Patrick Hillmann said the exchange was talking to every regulator worldwide. Hillmann declined to comment on if the exchange was under any probe in the United States.

Binance Marches on

These regulatory scrutinies recently resulted in a massive FUD around the exchange. The CZ-led firm processed over $6 billion in withdrawals over seven days as questions about its solvency were raised. Binance appeared to have emerged unscathed despite the current market conditions and the record-high withdrawals from its platform.

Meanwhile, several crypto companies, like Celsius, Voyager, BlockFi, FTX, etc., filed for bankruptcy in the past year. More recently, the financial health of crypto conglomerate Digital Currency Group and its subsidiary Genesis has drawn regulatory interest.

Amidst the struggles of its rivals in 2022, Binance said it secured 14 licenses and increased its workforce to over 7000 people. The exchange wants to expand its business into South Korea by acquiring a local crypto company Gopax.

More recently, Binance became the first exchange to join the Association of Certified Sanctions Specialists (ACSS), -a body focused on fostering sanction compliance measures.