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Federal Prosecutors Subpoena Hedge Funds Over Binance

According to the Washington Post, federal prosecutors are investigating the largest cryptocurrency exchange Binance and have subpoenaed several hedge funds as part of their investigation.

According to reports, the US Attorney’s Office in Seattle issued subpoenas to investment firms that do business with Binance. The hedge funds were required to provide records of their communications with the exchange, according to the report.

According to the report, the subpoenas do not necessarily indicate that the authorities intend to pursue any charges against the exchange; however, they do indicate federal interest in the firm’s operations.

Binance’s operations have piqued the interest of regulators in light of recent events in the cryptocurrency space.

According to reports, US Department of Justice officials considered prosecuting Binance in December. According to the report, officials were divided on how to respond to the exchange.

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

According to the Washington Post, Binance’s chief strategy officer Patrick Hillmann stated that the exchange was in contact with every regulator in the world. Hillmann declined to comment on whether the exchange was being investigated in the United States.

These regulatory investigations have recently resulted in a massive amount of misinformation surrounding the exchange. Over the course of seven days, the CZ-led firm processed over $6 billion in withdrawals as questions about its solvency were raised. Despite the current market conditions and record-high withdrawals from its platform, Binance appeared to have emerged unscathed.

Meanwhile, several cryptocurrency companies, including Celsius, Voyager, BlockFi, FTX, and others, have declared bankruptcy in the last year. Recently, regulators have expressed concern about the financial health of crypto conglomerate Digital Currency Group and its subsidiary Genesis.

In the midst of its competitors’ struggles in 2022, Binance announced that it had secured 14 licenses and increased its workforce to over 7000 people. The exchange plans to expand into South Korea by acquiring Gopax, a local cryptocurrency exchange.

Binance was recently the first exchange to join the Association of Certified Sanctions Specialists (ACSS), a body dedicated to promoting sanction compliance measures.

 

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