NEW YORK (CNN/Money) - The federal government is investigating the practices of a currency trading business backed by some of the nation's largest banks for possible antitrust violations, a newspaper reported Wednesday.

The Justice Department is scrutinizing overseas currency trader FXAII, a joint venture of several commercial and investment banks including Citigroup Inc (C: Research, Estimates)., J.P. Morgan Chase & Co. (JPM: Research, Estimates), Goldman Sachs Group Inc. (GS: Research, Estimates) and Credit Suisse Group's CSFB, for evidence of collusion and possibly restricting competition in the marketplace, the Wall Street Journal reported.

In response to growing competition in the market from companies such as Currenex and FXConnect, FXAII began currency trading online and over private networks at a time when most companies still had to call the banks or traders to get information, the report said, citing a letter from the department to Congress.

Online trading allowed for greater information flow and efficiency, but also for the possibility of price-fixing and cutting out competition, the Journal said.

Competitor Currenex claimed that FXAII's practices are marred by the close involvement of the banks; most of the Currenex backers are private companies, with its only bank being Barclay

An FXAII spokesman said the venture was in compliance with the law and that the group is cooperating with the investigation, the paper reported.

Former Justice Department official Mark Popofsky said all online joint-ventures will come under the microscope to a greater degree as online commerce continues to grow, the report said.