Binance News: Hedge Funds Subpoenaed Amid Binance Money-Laundering Investigation


  • Hedge funds who have worked with Binance (BNB-USD) have been subpoenaed by the U.S. Department of Justice.
  • These hedge funds are being asked to turn over communications with the crypto exchange.
  • The subpoenas are related to the Justice Department’s investigation into suspected money-laundering by Binance.
Binance news - Binance News: Hedge Funds Subpoenaed Amid Binance Money-Laundering Investigation

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All eyes have fallen on Binance (BNB-USD) in recent months. The crypto exchange, while being perhaps the most widely-recognized brand in the industry, is finding itself under the watchful eye of the U.S. Department of Justice. Today’s big Binance news follows the ongoing probe by the DOJ into the company. The government agency, in an effort to learn more about the inner workings of the company, is looking to Binance’s partners.

The Washington Post reports federal prosecutors have extended their investigation of Binance outward by subpoenaing hedge funds who have worked with the company in the past. Two insiders tell the news outlet that hedge funds who have dealt with Binance in the past are being asked by the U.S. attorney’s office for the Western District of Washington to turn over records of communication with the global crypto conglomerate.

Binance has a years-long history of working with hedge funds and venture capital firms. However, the concern for hedge funds over their dealings with Binance is not new, either. For years, regulators have been warning hedge funds against working with Binance due to the regulatory uncertainty and legal ambiguity of doing so. While this has scared off hedge funds in the past, the company is still wildly successful in attracting new clients, sizable revenue, and plenty of suitors willing to chance an investment.

These subpoenas are the newest addition to an investigation that’s coming up on its second anniversary. The Justice Department, alongside the Internal Revenue Service (IRS), opened the case in May of 2021 to find out whether Binance is enabling money laundering through its trading services.

Binance News: Justice Department Expanding Investigation

This Binance news makes for an interesting turn of events for the long-standing investigation by federal prosecutors. The revelation suggests that these investigators aren’t as close to the end of their probe as one might have thought a handful of weeks ago.

Indeed, it seemed like the probe was on its way to winding down as recently as December. At this time, reports revealed prosecutors were split over whether or not to levy charges against Binance for violations of the Bank Secrecy Act. Evidently, the more skeptical prosecutors have won out, as has been no word on charges. The subpoenas more or less confirm this, as investigators are scrounging for more evidence.

These subpoenas don’t mean that investigators will charge Binance, to be clear. Rather, the information they source from Binance’s business partners can help them to revisit the split from December. Pending any damning evidence, prosecutors can move to dismiss the question just as easily as they can move to charge Binance.

John Ghose, a former U.S. prosecutor, tells the Post that these subpoenas are likely the Justice Department’s method of determining whether Binance has U.S. customers. Since Binance does not claim to operate in the U.S., and instead operates a separate American entity, Binance.US, it does not seek to conform to the standards required of the Bank Secrecy Act. If these communications can prove otherwise, prosecutors will be able to move on Binance for not verifying American customers with the U.S. government.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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