Richard Blumenthal, the leading Democrat on a Senate Homeland Security investigative panel, has initiated an investigation into Binance after reports raised concerns about potential sanctions violations by the crypto giant.
Blumenthal, a Connecticut senator, sent a formal letter to Binance seeking clarification on the alleged $1.7 billion in transfers from platform accounts to organizations linked to Iran, including Yemen’s Houthi movement.
Investigations by The New York Times, Fortune, and The Wall Street Journal reported that Binance’s compliance team identified two platform partners, Hexa Whale and Blessed Trust, as intermediaries in suspected money laundering activities, allegedly facilitating transactions involving these Iranian government-tied entities.
According to multiple reports, the suspected violations were flagged by Binance’s own internal investigators, who were later disciplined or dismissed.
“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,” the senator wrote.
Blumenthal sent a letter to Binance co-CEO Richard Teng requesting documentation related to the company’s interactions with two Hong Kong-based entities linked to the alleged Iran-bound transfers, as well as documents regarding investigator firings.
The senator’s investigation followed more than two years after the cryptocurrency exchange pleaded guilty to charges related to failing to register as a money-transmitting business and violating sanctions, ultimately agreeing to pay an eye-watering $4.3 billion in penalties and exit the US market. Binance founder and ex-CEO Changpeng Zhao served a four-month prison sentence for his role before being pardoned by US President Donald Trump.
Binance Rejects Claims Of Sanctions Violations
A Binance spokesperson said the company “identified and reported suspicious activity,” asserting that this demonstrated the effectiveness of its compliance controls, while disputing the accuracy of the reports.
“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,” the spokesperson stated.
In a Sunday blog post, Binance stated that its “sanctions-related exposure is minimal.” Spokesperson Rachel Conlan told The New York Times that the exchange is conducting an internal investigation and plans to submit a full report to the U.S. Justice Department on February 25.
Source: https://zycrypto.com/us-senator-investigates-binance-over-alleged-1-7-billion-moving-to-sanctioned-iranian-entities/
