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US Hedge Funds Receive Subpoenas for Communications with Binance as Investigators Probe Crypto Exchange: Report

Binance, the world’s largest crypto exchange, is reportedly being investigated by federal prosecutors, leading to several US hedge funds being subpoenaed by the Western District of Washington in Seattle.

According to a report from the Washington Post, US prosecutors have ordered investment firms to turn over records of their communications with Binance.

The Washington Post cites two people who reviewed the subpoenas and spoke on condition of anonymity.

Binance Chief Strategy Officer Patrick Hillmann told The Washington Post that the exchange speaks to “virtually every regulator in the world” on a daily basis, but declined to comment specifically.

John Ghose, a former Justice Department prosecutor who specializes in cases involving digital assets, told the Washington Post that he believes prosecutors are looking into whether Binance violated the Bank Secrecy Act, which requires financial institutions to verify the identity of their customers and report suspicious activity. .

Ghose also said the subpoenas could suggest investigators are looking into Binance’s dealings with U.S. investors, though the former prosecutor doesn’t have direct knowledge of the situation.

“The basis for this fee is whether there are US customers…If there are US customers, there is a fee to avoid money laundering requirements.”

The head of one of the New York-based hedge funds with $2.5 billion in assets under management told the Washington Post that his company trades on Binance through firms outside the United States.

The fund manager reportedly said that even though Binance prohibits US citizens from accessing its platform, “businesses and citizens are very different.”

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