Sen. Richard Blumenthal, the top Democrat on the Senate Homeland Security Committee, launched an investigation on Tuesday into alleged sanctions violations by cryptocurrency exchange Binance, The New York Times reported on Wednesday.
Blumenthal, who represents Connecticut, sent a letter to Binance asking about $1.7 billion allegedly transferred from accounts on the platform to Iran-linked groups, including Yemeni Houthi rebels. According to multiple news reports, Binance’s internal investigators discovered the violations but were subsequently fired. The world’s largest cryptocurrency exchange denied the accusations in an email to CoinDesk.
“The New York Times’ previous reports were incorrect. Binance has strict KYC (know your customer) and compliance procedures, and there are no Iranian users on the platform,” a Binance spokesperson said in an email. The spokesperson also reiterated the exchange’s position “against the false accusations in these reports,” pointing to articles in The New York Times, Wall Street Journal and Fortune about the alleged firing of four investigators involved in the case.
According to the New York Times, Blumenthal sent a letter to Binance co-CEO Richard Teng requesting records of the company’s transactions with two Hong Kong entities identified by investigators as the source of transfers to Iran.
One of the accounts was registered to Blessed Trust, a Hong Kong company that serves as a supplier to Binance. Binance representatives said the exchange canceled the accounts in January and stopped working with Blessed Trust, the newspaper reported.
“Binance appears to have ignored warnings and recommendations to prevent Iran’s money laundering scheme on its cryptocurrency exchange,” Blumenthal wrote. The lawmaker also asked Teng to turn over records related to “the suspension and firing of compliance officers and investigators who reported alleged violations.”
Binance founder and former CEO Changpeng Zhao admitted in November 2023 to violating anti-money laundering laws and allowing customers from sanctioned countries such as Iran to trade on the platform. The company agreed to pay a $4.3 billion fine and withdraw from the U.S. market. Zhao was sentenced to four months in prison for his role and was later pardoned by President Donald Trump.
Binance said in a blog post on Sunday that its “risks related to sanctions are minimal.” Another spokesperson, Rachel Conlan, told The Times that the exchange is conducting an internal investigation and a full report will be sent to the U.S. Department of Justice on February 25.
