Several Hedge Funds Subpoenaed in Connection to Binance

Many American hedge funds are getting probed by United States prosecutors about their connection with the world-leading cryptocurrency exchange Binance in a case of money laundering violations. This is a part of a long-running investigation into Binance which has been on the table of the U.S. Department of Justice. 

The U.S. attorney’s office for the Western District of Washington in Seattle subpoenaed these hedge funds and investment firms requesting that they submit documents showing their communication with Binance in the last few months. These probes do not imply that charges have been levied against any of the investigated hedge funds and it does not still suggest that any will be.

For now, evidence is still being analyzed and the prosecutors are considering a possible settlement with Binance.

Patrick Hillmann, Binance’s Chief Strategy Officer explained that the firm has been making several efforts to comply with regulations in various jurisdictions globally. He, however, noted that in the first few years of Binance’s existence, the exchange lagged in that aspect.

Binance Long-Running Money Laundering Investigation 

At a certain time, the Binance money laundering violation investigation was delayed owing to a controversy amongst prosecutors of the Justice Department.

Some prosecutors held the opinion that the proof that was presented against Binance was enough to justify aggressive actions against the exchange and some of its officials including its Chief Executive Officer (CEO) Changpeng Zhao. 

A spokesperson from the crypto exchange said “We don’t have any insight into the inner workings of the US Justice Department, nor would it be appropriate for us to comment if we did.”

No verdict has been made to indict the leading digital assets service provider, nor any of these hedge funds under examination. However, if eventually found guilty in these investigations, Binance’s market dominance may be affected. Already, the publication of Binance Proof-of-Reserve (PoR) amidst the implosion of rivalry exchange FTX has caused chaos amongst users. 

Within twenty-four hours, Binance users had initiated and completed huge withdrawals with about $1 billion. U.S.-headquartered proprietary trading firm Jump Trading and Wintermute, a global crypto market maker were part of the firms that pulled huge funds out of Binance.