• The US authorities are currently investigating American hedge funds for their dealings with the Malta-based crypto exchange, Binance.
• Federal prosecutors have recently requested specific firms to surrender records of their conversations with Binance’s CEO, Changpeng Zhao (CZ).
• Legal experts suggest that the subpoenas may not lead to legal charges.
The cryptocurrency industry has been plunged into a tumultuous year, with the US authorities now zooming in on American hedge funds in relation to their investments in Binance, the largest crypto exchange by daily trading volume.
The Washington Post recently reported that federal prosecutors are currently digging into the dealings of certain hedge funds with the Malta-based exchange. Binance’s CEO Changpeng Zhao (CZ) has found himself in the spotlight over allegations of money laundering and has spent several months defending his exchange against such claims.
In recent months, the US attorney’s office for the Western District of Seattle has issued subpoenas to specific firms, requesting records of their conversations with Binance, according to two anonymous sources who reviewed one of the subpoenas. While legal experts state that the subpoenas may not lead to legal charges, discussions are centered around the possibility of a settlement between the US authorities and the hedge funds.
CZ has remained firm in the face of the allegations, stating that Binance is committed to adhering to regulatory compliance and implementing the highest standards of anti-money laundering (AML) and countering the financing of terrorism (CFT). He has also pointed out that the exchange has been able to weather the turbulence of the past year, as evidenced by its record-breaking trading volume and its ever-growing user base.
The US government’s investigation into hedge funds and their dealings with Binance serves as a reminder of the importance of conducting due diligence when investing in cryptocurrencies. As the crypto space continues to evolve and mature, US authorities are expected to further clamp down on the industry and increase their level of scrutiny on potential money-laundering and other illicit activities.