United States prosecutors are investigating the hedge fund’s ties to cryptocurrency exchange Binance for money laundering violations.
According to an anonymous source cited by the Washington Post, the US attorney’s office for the Western District of Washington in Seattle subpoenaed the investment firm to provide records of its communications with Binance last month.
The alleged subpoena does not mean prosecutors will bring charges against the crypto exchange or hedge fund, as authorities are still evaluating the evidence and the possibility of a settlement with Binance, according to legal specialists.
Binance did not immediately respond to Cointelegraph’s request for comment.
Binance has been under investigation in the United States since 2018, when prosecutors began investigating several cases of illegal funds moving through the exchange. The alleged offenses include unlicensed money transmission, money laundering conspiracy and breach of criminal sanctions.
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The Bank Secrecy Act requires crypto exchanges that do “substantial” business in the United States to register with the Treasury Department and comply with anti-money laundering regulations.
Binance chief strategist Patrick Hillmann admitted to the Washington Post that the company had a poor approach to regulatory compliance in the early years, but has made significant investments in compliance programs.
To stay compliant with global sanctions, Binance has joined the Association of Certified Sanctions Specialists, or ACSS. On January 6, the crypto exchange announced that its sanctions compliance team will undergo certification training at ACSS.
The ACSS training is expected to educate the Binance team on guidelines from the US Treasury’s Office of Foreign Assets Control and inform them of the potential risks of a breach.
Binance recently joined the American crypto lobby group Chamber of Digital Commerce, after receiving criticism for being unregulated. The group supports various public policies, including tax parity for digital assets, Anti-Money Laundering / Know Your Customer regulations for crypto exchanges, increased regulatory clarity for security tokens and research on central bank digital currencies.