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US Prosecutors Probe Binance Hedge Fund Connections

Though the cryptocurrency market took a shift to the new year, CZ’s empire has been continually tested. Following Reuters, the Washington Post was the next top publication to set its sights on Binance.

According to a new report by The Washington Post, the US prosecutors initiated legal proceedings against the leading crypto exchange for fraud.

The mainstream publication said that the US authorities recently ordered that investment firms give documents relating to Binance after it was determined to have anomalous transactions.

More Heat All Around

Binance is currently facing a lot of charges and is being investigated for crimes such as unauthorized money transfer, money laundering conspiracy, and sanctions violation.

The US Department of Justice (DoJ) has launched an investigation into the relationship between Binance and hedge funds. Binance is obligated to pass over messages from its founder, leadership members, and numerous partners in transactions and user development.

The DoJ accused Binance of destroying papers, modifying and erasing information from the system. The content determined to be transferred from the United States were also the DoJ’s target.

Cryptocurrency transactions must be registered with the US Treasury Department under the US Bank Secrecy Act, and violations can result in a prison sentence of up to ten years.

According to the Washington Post, Binance’s Chief Strategy Officer, Patrick Hillmann, admitted that there were gaps in regulatory compliance early in the business.

However, the situation has improved, and the organization now has a team that attends Association of Certified Sanctions Professionals training sessions (ACSS).

Last Exchange Standing

Binance is the world’s largest cryptocurrency exchange, with operations in over 100 countries. Money laundering and legal violation are the major concerns recently, particularly after FTX, one of the world’s largest cryptocurrency exchanges, was exposed.

Since a string of failures that sparked the collapse of the cryptocurrency market as a whole, the leading cryptocurrency exchanges that are still operating have been under constant pressure from regulatory authorities.

As a result of the confidence crisis, retail investors quickly pulled their money out of the exchange, which caused Binance to struggle. The acquisition of troubled cryptocurrency lender Voyager Digital by Binance was also confronted with criticism from significant forces.

The US Securities and Exchange Commission (SEC) has expressed opposition to the Binance US’s acquisition deal.

Binance secured a $1 billion deal to acquire the defunct cryptocurrency lender Voyager Digital. In a filing submitted on Wednesday, the SEC made some limited objections, highlighting the fact that Binance’s purchase needed information.

The agency requested more details concerning the nature of Binance’s operations following the acquisition.

The securities and banking officials in the states of Texas, New York, New Jersey, and Vermont are also in opposition to the exchange over the December. Alameda Research, the bankrupt trading division of FTX, also opposed the sale, arguing that it unfairly discriminates against certain groups.

Global Pressure

Previously, French investors sued the cryptocurrency exchange for misleading practices and lying about what was going on.

A group of 15 investors sued Binance France and its parent company at the end of December 2022. The exchange was accused of violating the French regulations by promoting crypto services without registration with government authorities.

Screenshots were provided by the investors who brought the legal action to demonstrate how Binance operated online before the company was officially registered.

The plaintiffs asked for a compensation of around €2.4 million, which is equivalent to the amount of money they lost when TerraUSD (UST)crashed.

In response to the allegations, Binance published a blog post noting that it prohibits any promotional activity prior to the user registering for an account.

The cryptocurrency exchange made it clear that it had always shown warning notifications about the potential risks involved with the cryptocurrency industry.

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