• U.S. authorities have sent subpoenas to American hedge funds and market-making companies dealing with Binance, the world’s largest cryptocurrency exchange.
• The subpoenas are part of a larger investigation into the potential violations of money-laundering laws by the world’s largest crypto exchange.
• The federal probe into Binance has come to light at a time when the crypto industry is struggling with an unfriendly stance from regulators around the globe.
U.S. federal prosecutors are currently investigating one of the world’s largest cryptocurrency exchanges, Binance. Subpoenas have been sent to American hedge funds and market-making companies dealing with the crypto exchange, asking for records of their communications with the platform. This is part of a larger investigation into the potential violations of money-laundering laws by the world’s largest crypto exchange, which was first reported by Bloomberg in June last year.
The U.S. attorney’s office for the Western District of Washington in Seattle is leading the investigation, and the SEC is also examining whether Binance’s initial coin offering of its BNB token back in 2017 was an unregistered security offering. Binance’s chief strategy officer Patrick Hillmann has reportedly said that the exchange is talking to „virtually every regulator across the globe on a daily basis.“
While the subpoenas do not necessarily mean authorities are likely to bring charges against the exchange, legal experts have said that prosecutors are still discussing a possible settlement with Binance and weighing whether they have enough evidence to bring indictments against the company. The federal probe into Binance has come at a time when the crypto industry is struggling with an unfriendly stance from regulators around the globe. The recent implosion of FTX, once the third-largest crypto exchange in the world, has further exacerbated concerns around unregulated online marketplaces where digital assets are bought and sold.
Binance’s probe could have far-reaching implications for the crypto industry. If the U.S. government is able to prove that the exchange has violated money-laundering laws, it could set a precedent for other exchanges and could lead to stricter regulations on the crypto industry. It could also put a damper on the growth of the industry if the exchange is found to be guilty, as it is one of the most popular exchanges in the world.
At the same time, the investigation could also lead to more transparency in the crypto industry, as exchanges like Binance would be forced to comply with all applicable laws and regulations. This could help to alleviate some of the fears surrounding the use of cryptocurrencies, as investors would be more reassured that their investments are secure and their funds are safe.
Regardless of the outcome of the investigation, it is clear that the crypto industry is currently facing increased scrutiny from authorities. It remains to be seen how this investigation will affect the future of the industry, but it is sure to be an interesting development to watch out for.