Federal prosecutors have been investigating the largest crypto exchange in the world, Binance, for about four years now.
However, the exchange’s close proximity to the now-defunct crypto exchange FTX, has prompted them to ask for new information in the said investigation.
In the last couple of months, financial firms have been contacted by the US attorneys in Seattle for their communication records with Binance.
Two anonymous sources revealed this matter, as they had had a look at the subpoenas.
The money laundering team of the Department of Justice (DOJ), the National Cryptocurrency Enforcement Team and the US Attorney’s Office in Seattle are all involved in the said investigation.
The crypto enforcement team of the Justice department was founded in 2021 and last February, it got a new director in the form of Eun Young Choi.
The investigation into the Binance crypto exchange actually predates the formation of the said team. A spokesperson for Binance talked about the investigation.
They said that the entire crypto industry was under review by the regulators. They added that there had been rapid growth in the nascent industry and Binance was committed to ensuring security and compliance.
They said that Binance had invested in technology, tools as well as its team for deterring and detecting illicit activity.
Reuters reported that there is a conflict amongst the Justice department’s prosecutors about whether they should file charges against executives of Binance with the evidence they have already gathered or not.
This includes the founder and CEO of the crypto exchange, Chanpeng Zhao. According to some sources familiar with the matter, some prosecutors believe they should keep building the case before filing charges.
Binance responded to the Reuters report on Twitter and said that it was attacking their law enforcement team and referred to a post of their head of investigations and intelligence, Tigran Gambaryan.
Tigran Gambaryan disclosed in the post that they had dealt with 47,000 law enforcement requests last year and had handled them.
He said that most of what they do happens behind the scenes and is not in the spotlight, which means that the media or the wider public rarely recognizes it.
While the US investigation continues, Binance has been spending its time adding former federal investigators to its compliance department, including Gambaryan.
The company has also talked about cooperating with law enforcement to freeze stolen funds and finding hackers.
Even though the interest of investigators in Binance has been fueled due to the collapse of the FTX exchange, Zhao has asserted that he or his company did not cause the downfall.
The Chinese blog of Binance said that misappropriating user assets was the reason FTX collapsed because a tweet cannot just destroy a healthy firm.
This post was referring to Zhao’s November 6th tweet in which he had disclosed that Binance would was liquidating its FTT holdings, the native token of FTX.
The Commodity Futures Trading Commission (CFTC) has also been investigating Binance separately for potential insider trading.