Binance’s proximity to collapsed competitor FTX gave federal prosecutors reason to seek new information in a four-year-old investigation into the world’s largest cryptocurrency exchange.
Over the past few months, U.S. attorneys in Seattle have asked financial firms to turn over records of their correspondence with Binance, according to the weekend. washington post report. The paper cited two anonymous sources who reviewed the subpoenas.
The investigation involved the Department of Justice’s money laundering team, Seattle’s federal attorney’s office, and the National Cryptocurrency Enforcement team, according to a December report. Reuters.
In fact, the Binance investigation itself predates the creation of the Department of Justice’s Crypto Enforcement Team, which was formed in 2021 and welcomed new director Eun Young Choi last February.
“As has been widely reported, regulators are conducting a sweeping overhaul of the entire cryptocurrency industry for many of the same issues,” said a Binance spokesperson. Decryption“This nascent industry is growing rapidly, and Binance has invested heavily in our team, as well as the tools and technology we use to detect and thwart fraudulent activity. and demonstrated a commitment to compliance.”
The Justice Department did not immediately respond to a request for comment from Decryption.
Prosecutors at the U.S. Department of Justice say they are divided over whether the evidence already collected is sufficient to indict Binance executives. Reuters, including CEO Changpeng Zhao. Four unnamed sources familiar with the matter told the press in December that at least some of the prosecutors involved in the investigation needed the government to continue to produce evidence before they were charged. said he thinks there is
Those who wanted to wait have so far given way.
Binance has called out very publicly Reuters On Twitter, he said the December report was “attacking an incredible law enforcement team,” with a link to a blog post from the company’s head of intelligence and investigations, Tigran Gambaryan.
In the post, Gambaryan advertises that the company will handle more than 47,000 law enforcement requests in 2022. .
Binance stuffs compliance department with ex-federal agents like Gambarian to work with law enforcement to find hackers and freeze stolen funds, even as US investigation quietly progresses I’m talking about it publicly.
The aftermath of FTX’s demise seems to have sparked investigator interest in the company, but Zhao is adamant that he and his company are not to blame.
According to a translation of Binance’s Chinese blog post, “FTX falls because of misappropriation of user assets, and a healthy company will not be destroyed by a tweet.” The company has announced that it will liquidate its FTX token stash.
Liquidating our FTT is just a post-exit risk management lesson learned from LUNA. We used to support each other, but after the divorce, we don’t pretend to love each other. We are not against anyone. However, we do not support those who lobby other industry players behind the scenes. next.
— CZ🔶 Binance (@cz_binance) November 6, 2022
“Liquidating our FTT is just post-exit risk management, learning from LUNA,” he wrote. on Twitter“We used to support each other, but after the divorce, we don’t pretend to love each other.”
Meanwhile, there is also another ongoing investigation by the Commodity Futures Trading Commission (CFTC) regarding possible insider trading on Binance. News of that investigation first went public in 2021, the same year the CFTC announced it would grant US derivatives traders access to its exchange rather than its US-based arm, Binance US. An attempt was made to determine whether or not it was permitted.
Given the state of the crypto market over the past year, each collapse brings increased scrutiny to companies that are still standing.
