Federal prosecutors are reportedly investigating U.S.-based hedge funds that dealt with crypto-currency exchange Binance, according to two people familiar with the matter. The hedge funds have reportedly received subpoenas from the U.S. Attorney’s Office for the Western District of Washington.
Sources say the U.S. Department of Justice is investigating U.S. hedge funds as part of a crypto-currency probe.
Following a Reuters investigation in mid-December 2022 that Binance is under investigation by the U.S. Department of Justice. The Washington Post says U.S. hedge funds are being investigated as part of the probe. Washington Post contributor Douglas MacMillan says subpoenas have been issued to the hedge funds and are from the U.S. Attorney’s Office for the Western District of Washington.
Douglas MacMillan cites two sources that “reviewed one of the subpoenas and spoke on condition of anonymity to discuss this confidential matter“. The reporter adds that the subpoenas do not mean investigators will file charges. “Prosecutors are still discussing a potential settlement with Binance and evaluating whether they have enough evidence to file charges against the company“, writes Douglas MacMillan.
The world’s largest exchange by trading volume, Binance, has been in the spotlight for the past two months since the FTX collapse. Douglas MacMillan spoke with Patrick Hillmann, Binance’s chief strategy officer, who said the exchange was talking daily with “virtually every regulator in the world“. Patrick Hillmann, however, and a DOJ spokesman declined to comment on the alleged investigation.
The subpoena report comes at a time when the media is reporting on a number of ostensible investigations into cryptoasset companies and companies associated with those companies. In late December 2022, the Wall Street Journal (WSJ) reported that the U.S. Securities and Exchange Commission (SEC) was investigating companies that audit crypto exchange reserves. A large handful of these so-called investigations have not been officially verified by U.S. law enforcement officials, but it’s safe to say the reports have the crypto community on edge these days.