US Senator Richard Blumenthal, a top Democrat on the Senate Homeland Security Committee, on Tuesday opened an investigation into alleged sanctions violations at crypto exchange Binance, the New York Times reported on Wednesday.
Blumenthal, who represents Connecticut, sent Binance a letter asking about $1.7 billion allegedly transferred from accounts on the platform to organizations linked to Iran, including Yemen’s Houthi militants. The violations were identified by internal Binance investigators who were later dismissed, according to multiple media reports. The world’s largest crypto exchange denied the allegations in an email to CoinDesk.
“The New York Times’ previous report is incorrect. Binance has strict compliance and KYC (know your customer) procedures, and there are no Iranian users on the platform,” a Binance spokesperson said in the email. The spokesperson also reiterated the exchange’s stance “against the false claims in these reports,” referring to articles in the New York Times, Wall Street Journal and Fortune about the alleged firing of the four researchers involved.
Blumenthal sent a letter to Binance co-CEO Richard Teng requesting records of the company’s dealings with two Hong Kong entities identified by investigators as the origin of the transfers to Iran, the New York Times said.
One of the accounts was registered to Blessed Trust, a Hong Kong company that acted as a provider for Binance. According to the newspaper, a Binance representative said that the exchange canceled the accounts and stopped working with Blessed Trust in January.
“Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange,” Blumenthal wrote. The lawmaker also asked Teng to turn over records about “the suspension and dismissal of compliance staff and investigators” who pointed out the alleged violations.
Binance founder and former CEO Changpeng Zhao pleaded guilty in November 2023 to violating anti-money laundering laws and allowing customers in countries under sanctions, including Iran, to transact on the platform. The company agreed to pay $4.3 billion in fines and leave the U.S. market. Zhao served four months in prison for his role before being pardoned by President Donald Trump.
Binance said in a blog post on Sunday that its “sanctions-related exposure is minimal.” Rachel Conlan, another spokeswoman, told the Times that there is an ongoing internal investigation into the exchange and that a full report would be sent to the US Department of Justice on February 25.
