A senior U.S. lawmaker has launched a congressional inquiry into the cryptocurrency exchange Binance amid allegations that it processed approximately $1.7 billion in transactions associated with sanctioned Iranian entities and Russia’s oil “shadow fleet.” The inquiry was initiated by Senator Richard Blumenthal, the ranking member of the Senate Permanent Subcommittee on Investigations, who has requested documentation from Binance’s CEO, Richard Teng, regarding the exchange’s sanctions compliance and internal controls.
Details of the Inquiry
In a letter sent to Teng, Blumenthal cited reports from major media outlets, including the Wall Street Journal, New York Times, and Fortune. He indicated that Binance’s compliance team had identified two partner entities, Hexa Whale and Blessed Trust, as intermediaries facilitating trade with Iranian government-linked organizations. Investigators reportedly traced transactions to wallets linked to Iran’s Islamic Revolutionary Guards Corps and payments to crews operating tankers that circumvent sanctions on Russian oil exports.
Binance’s Response
In response to the allegations, a spokesperson for Binance stated that the claims are inaccurate, asserting that the platform actively identifies and reports suspicious activity. The spokesperson emphasized that Binance does not permit Iranian users on its platform. They highlighted the exchange’s significant compliance transformation over recent years, which they claim has led to achieving various regulatory milestones.
Previous Compliance Issues
This inquiry follows Binance’s previous settlement with U.S. authorities in 2023, where the company agreed to pay $4.3 billion for violations related to anti-money laundering (AML) and sanctions. As part of that settlement, founder Changpeng Zhao stepped down as CEO and served a four-month prison sentence. The current inquiry raises questions about Binance’s adherence to the terms of that agreement.
Deadline for Compliance Documentation
Senator Blumenthal has set a deadline of March 6 for Binance to provide the requested documents, which include communications, account records, and internal compliance reports related to users connected to Iran and Russian sanction-evasion networks. The outcome of this inquiry could have significant implications for Binance’s operational practices and regulatory standing.
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