US Senator Richard Blumenthal, a top Democrat on the Senate Homeland Security Committee, on Tuesday opened an investigation into alleged sanctions violations at the crypto exchange Binance, the New York Times reported on Wednesday.
Blumenthal, who represents Connecticut, sent Binance a letter asking about the $1.7 billion allegedly transferred from accounts on the platform to Iran-linked organizations, including Yemen’s Houthi militants. The violations were identified by internal Binance investigators, who were subsequently fired, according to multiple news reports. The world’s largest crypto exchange denied the allegations in an email to CoinDesk.
“The New York Times’ previous reporting is incorrect. Binance has strict KYC (know-your-customer) and compliance procedures in place, and there are no Iranian users on the platform,” a Binance spokesperson said in the email. The spokesman also reiterated the stock exchange’s stance “against false allegations in these reports,” citing articles from the New York Times, Wall Street Journal and Fortune about the alleged firing of the four investigators involved.
Blumenthal sent a letter to Binance’s CEO, Richard Teng, asking for records of the company’s transactions with two Hong Kong entities that investigators identified 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 Binance vendor. According to the newspaper, a Binance representative said the exchange canceled the account and stopped working with the 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 hand over records of “suspension and dismissal of compliance staff and investigators” that flagged the alleged violations.
Binance’s founder and former CEO, Changpeng Zhao, pleaded guilty in November 2023 to violating money laundering laws and allowing customers in countries under sanctions, including Iran, to trade on the platform. The company agreed to pay $4.3 billion in fines and exit the US 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 at the exchange and that a full report will be sent to the US Department of Justice on February 25.
