Sunday, February 5, 2023
 

Binance Under Scrutiny as Prosecutors Probe Hedge Fund Connection

  • U.S. Attorney’s office is investigating Binance.
  • No charges have been brought up yet by the U.S. Attorney’s office.
  • Prosecutors are considering a potential settlement.

The U.S. attorney’s office for the Western District of Washington has reportedly sent subpoenas to investment companies demanding documents of their conversations with Binance over the past several months.

As reported by the Washington Post, Federal officials are still considering a potential settlement with Binance and analyzing whether the information they have is adequate to file charges. The subpoenas do not necessarily indicate that authorities will seek charges against Binance or its founder and CEO Changpeng Zhao aka CZ.

Binance’s chief strategy officer, Patrick Hillmann, said in an interview that the business is contacting “virtually every regulator across the globe on a daily basis.” However, he did not comment on the current status of any probe in the United States.

The subpoenas come as Binance confronts increased media and regulatory scrutiny over its business operations and financials. Legal experts stated that Binance has a history of skirting rules and exploiting legal loopholes to operate globally. According to a former DOJ prosecutor, the company’s prior absence of identification requirements aroused worries from legislators over the platform’s involvement in money laundering.

Crypto exchanges that do “substantial” business in the United States are required under the Bank Secrecy Act to register with the Treasury Department and follow AML guidelines. While Hillmann acknowledged that the firm took a lax stance on compliance in its early years, he added that it has since invested heavily in compliance initiatives.

Meanwhile, Binance recently become a member of the Chamber of Digital Commerce, an American crypto lobbying group. The organization promotes a number of public policies, such as tax neutrality for digital assets, AML/KYC rules for cryptocurrency exchanges, more clarity in the regulation of security tokens, and research of central bank digital currencies.

  • U.S. Attorney’s office is investigating Binance.
  • No charges have been brought up yet by the U.S. Attorney’s office.
  • Prosecutors are considering a potential settlement.

The U.S. attorney’s office for the Western District of Washington has reportedly sent subpoenas to investment companies demanding documents of their conversations with Binance over the past several months.

As reported by the Washington Post, Federal officials are still considering a potential settlement with Binance and analyzing whether the information they have is adequate to file charges. The subpoenas do not necessarily indicate that authorities will seek charges against Binance or its founder and CEO Changpeng Zhao aka CZ.

Binance’s chief strategy officer, Patrick Hillmann, said in an interview that the business is contacting “virtually every regulator across the globe on a daily basis.” However, he did not comment on the current status of any probe in the United States.

The subpoenas come as Binance confronts increased media and regulatory scrutiny over its business operations and financials. Legal experts stated that Binance has a history of skirting rules and exploiting legal loopholes to operate globally. According to a former DOJ prosecutor, the company’s prior absence of identification requirements aroused worries from legislators over the platform’s involvement in money laundering.

Crypto exchanges that do “substantial” business in the United States are required under the Bank Secrecy Act to register with the Treasury Department and follow AML guidelines. While Hillmann acknowledged that the firm took a lax stance on compliance in its early years, he added that it has since invested heavily in compliance initiatives.

Meanwhile, Binance recently become a member of the Chamber of Digital Commerce, an American crypto lobbying group. The organization promotes a number of public policies, such as tax neutrality for digital assets, AML/KYC rules for cryptocurrency exchanges, more clarity in the regulation of security tokens, and research of central bank digital currencies.

 

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