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 inquiring about $1.7 billion allegedly transferred from the platform’s accounts to organizations linked to Iran, including Houthi militants in Yemen. The violations were identified by internal Binance investigators who were later fired, according to multiple reports. The world’s largest crypto exchange denied the allegations in an email to CoinDesk.
“Prior reports from the New York Times are 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 spokesperson also reiterated the exchange’s position “against the false allegations contained in these reports,” referencing articles from The New York Times, The Wall Street Journal and Fortune about the alleged firing of the four investigators involved.
Blumenthal sent a letter to Binance co-chief executive Richard Teng requesting records of the company’s transactions with two Hong Kong entities identified by investigators as being behind the transfers to Iran, the New York Times reported.
One of the accounts was registered with Blessed Trust, a Hong Kong company that served as Binance’s provider. According to the newspaper, a Binance representative said 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 on “the suspension and termination of compliance personnel and investigators” who reported the alleged violations.
Binance founder and former CEO Changpeng Zhao pleaded guilty in November 2023 to violating anti-money laundering laws and allowing customers from sanctioned countries, including Iran, to transact on the platform. The company agreed to pay $4.3 billion in penalties and exit 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 exposure is minimal.” Rachel Conlan, another spokeswoman, told the Times that an internal investigation was underway into the exchange and that a full report would be sent to the U.S. Department of Justice on February 25.
