Senate Investigation Targets Binance Over Alleged Sanctions Violations Involving Iran and Russia
Senator demands documents from cryptocurrency exchange Binance following allegations of $1.7 billion in transactions connected to sanctioned Iranian and Russian entities, though the platform maintains its innocence.
A prominent United States lawmaker has initiated a fresh congressional investigation targeting cryptocurrency exchange Binance after allegations surfaced that the trading platform facilitated approximately $1.7 billion worth of transactions connected to Iranian entities under sanctions and Russia's so-called oil "shadow fleet."
Senator Richard Blumenthal, who holds the position of ranking member on the Senate Permanent Subcommittee on Investigations, dispatched a formal letter to Richard Teng, Binance's Chief Executive Officer, on Tuesday. The communication demanded documentation and internal company records concerning the platform's sanctions enforcement mechanisms and compliance procedures.
Drawing from published accounts in the Wall Street Journal, New York Times and Fortune, Senator Blumenthal noted that compliance personnel at Binance had flagged two partner companies, specifically Hexa Whale and Blessed Trust, as intermediary organizations facilitating commercial activity with Iranian government-associated institutions. According to reports, internal compliance investigators additionally tracked fund transfers to cryptocurrency wallets linked to Iran's Islamic Revolutionary Guards Corps, along with disbursements to personnel operating vessels utilized to circumvent sanctions targeting Russian oil shipments.
Binance appears to have ignored clear warning signs, knowingly allowed illicit accounts to operate, and even provided hands-on support to entities engaged in money laundering
Senator Blumenthal stated. His formal request encompassed correspondence records, user account documentation and internal compliance assessments, specifically including any materials concerning platform users with connections to Iran and individuals participating in Russian sanctions-circumvention operations.
Binance denies sanctions allegations
In a statement provided to Cointelegraph, a representative from Binance asserted that the recent accusations lack accuracy, emphasizing that the platform both detected and reported questionable activity. The cryptocurrency exchange challenged previous media reporting and reaffirmed its position that Iranian users are prohibited from accessing the platform.
Over the last several years, Binance has undergone one of the industry's strongest compliance transformations, which has allowed us to achieve our current regulatory milestones
According to the company spokesperson.
The exchange has consistently rejected the recent allegations reported in various media outlets. A week prior, Binance refuted a Fortune article that alleged the platform had processed transactions exceeding $1 billion connected to Iran and that it had terminated investigators who expressed concerns about such activity.
On the same Tuesday, Richard Teng, serving as Binance's CEO, also condemned a Wall Street Journal article that claimed $1.7 billion in Iran-connected transfers had been processed, characterizing the report as defamatory and insisting on a formal retraction. In a blog entry published Monday, the exchange stated it has dramatically reduced its exposure to jurisdictions under sanctions and those deemed high-risk, asserting an approximately 97% decrease from January 2024 levels to roughly 0.009% of total exchange transaction volume.
Senate probe questions Binance compliance
This congressional investigation arrives on the heels of Binance's 2023 resolution with United States regulatory authorities, wherein the exchange consented to remit $4.3 billion in penalties for violations of Anti-Money Laundering (AML) regulations and sanctions enforcement. Company founder Changpeng Zhao resigned from his position as Chief Executive Officer and subsequently completed a four-month incarceration period. The exchange additionally consented to regulatory oversight and committed to bolstering its compliance infrastructure.
In his correspondence, Senator Blumenthal indicated that the recently disclosed transactions could potentially call into question the platform's compliance with the terms of that settlement agreement. The senator established March 6 as the deadline by which Binance must furnish the requested documentation and materials.