Binance Exchange is Under Strict Scrutiny by U.S. Prosecutors – Here’s What’s Happening

Author: Sohrab Khawas

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    The U.S. prosecutors are currently investigating the connection between Binance and American Hedge funds for possible violations of money-laundering rules and are under strict scrutiny by them. Subpoena had been sent to firms to discuss their communications and dealings with Binance. The firms remain anonymous as they chose to remain anonymous for the legal proceedings. 

    Subpoenas don’t mean that the prosecutors can prepare a charge sheet against the company but it is a legal way to collect evidence and clear the possible allegations against the firm. If the investigators are finding any evidence related to illegal activities happening in the company, they may be authorized to prepare a charge sheet. Or else it will be written off from the legal proceedings there only. However, Binance still has hope that there is room for a potential settlement. 

    Binance, one of the largest cryptocurrency exchanges in terms of trading volume, has been always in the media for many reasons. And this time, it is for a bad reason. The firm had initially accepted customers without KYC verifications. This has helped many criminals to keep their illegal money safely on Binance. 

    Binance has a reputation for finding legal loopholes and operating in countries in a customized manner. It sure did help Binance in growing customers and building crypto markets around the world. At the same time, it had been used by hackers and anti-social agents without any problem. Even though cryptocurrency is the future of money, if exchanges are unregulated, it can create more harm in society. Hence the severe scrutiny for Binance is justified.

    The Binance team responded that it is open for investigation and is cooperating with the regulatory bodies. The team said that people are losing trust in cryptocurrency, and there had been massive withdrawals from the exchange due to the fear of losing money.

    But the Binance team reassured that the assets in the Binance system are secured and always backed up. Even if there are massive withdrawals and mistrust, the company will continue to function as normally as it had been operating the business before. 

    The team also reiterated that it is a compliant company and has always worked alongside governing bodies. It abides by the law and has developed technologies to spot fraudulent activities and catch fraudsters within its system. 

    Many crypto companies had supported FTX in the past. When Binance announced its mass withdrawal from FTX, the customers panicked and started withdrawing from FTX in a fast-paced manner. Neither did FTX have the backup for massive withdrawals nor did it had operated business with integrity. Hence FTX fell within a few weeks after Binance withdrew from it.

    There had been massive withdrawals in the past few months in every exchange due to public panic about losing hard-earned money. The bright side is that U.S. legal firms are strict and have always worked in favor of the public. 

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