The US Federal Bureau of Investigation (FBI) has launched an investigation into allegations of money-laundering at troubled Malaysian state fund 1MDB, the Wall Street Journal reported on Sunday citing an unidentified source.
The scope of the investigation into the debt-laden 1Malaysia Development Berhad (1MDB) was not clear, said the newspaper, which cited "a person familiar with the matter".
Neither the FBI nor 1MDB responded to a request for comment.
The reported FBI investigation comes shortly after a former member of Malaysia's ruling party was arrested just before travelling to the United States where he planned to make a police complaint and urge U.S. authorities to look into the allegations of money-laundering at 1MDB.
1MDB's advisory board is chaired by Prime Minister Najib Razak. The fund has been dogged by controversy over its $11 billion debt and alleged financial mismanagement.
A series of international investigations are underway as the scandal surrounding the fund widens.
Swiss authorities said this month they had frozen funds in Swiss banks amid investigations into 1MDB. Hong Kong authorities also said they were investigating a complaint related to the firm.
The WSJ had reported in July that investigators looking into 1MDB had found that nearly $700 million was transferred into the personal bank account of Najib.
The prime minister has denied taking money from 1MDB or anywhere else for personal gain.
Malaysia's anti-graft agency declared the funds a donation.
Najib has faced unprecedented criticism from within his ruling party, in particular form veteran former Prime Minister Mahathir Mohamad, who has called on Najib to step down.
Both anti-government and pro-government protesters have taken to the streets in recent weeks, raising concern about political stability.