US senators have labeled Binance a “repeat offender” as they prepare to launch an inquiry into nearly $2 billion worth of crypto that was sent to Iran, raising doubts over the exchange’s commitment to a plea deal agreement with the Department of Justice.
Democrat Senator Richard Blumenthal, who represents the Subcommittee on Investigations, wrote to Binance CEO Richard Teng on Tuesday, asking him to provide information on the company’s role in sanction-dodging transactions to Iranian and Russian entities.
The letter reads: “Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange, allowing $1.7 billion in transfers to Iran. These transactions have helped prop up Iranian-linked terrorist organizations and illicit Russian oil sales.”
Read more: Binance demands the Wall Street Journal remove ‘damaging’ article
It also claims that Binance is revisiting the crimes of its past, specifically from 2023, when it was found guilty of charges including sanction violations stemming from crypto sent to Iranian entities.
“Binance is a repeat offender: it has long been aware that the Iranian regime and its terrorist proxies use its cryptocurrency platform as a convenient and reliable means to bypass international sanctions, anti-money laundering controls, and other banking restrictions,” it reads.
Blumenthal continues, “Instead of actually preventing illicit use, Binance has sought to evade accountability and influence the White House through lobbying and a financial partnership with World Liberty Financial (WLFI).”
The letter also claims, “The scale of the newly-revealed illicit transfers uncaught until nearly two billion dollars flowed to sanctioned entities and the unexplained firing of internal investigators call into question Binance’s compliance with American sanctions and banking laws, and its 2023 agreement to resolve the previous federal investigation.”
Blumenthal backs up his allegations by noting Binance’s deep connections with the Trump family and WLFI through promotions, and the housing of 85% of WLFi’s stablecoin USD1 in Binance accounts.
All this, he says, led to a successful “influence campaign” that secured Changpeng Zhao’s pardon and the dismissal of a lawsuit against Binance.
Binance reportedly didn’t stick to compliance measures
The Wall Street Journal, Fortune, and The New York Times have all reported on two Binance clients, Hexa Whale and Blessed Trust, acting as intermediaries for Iran’s Revolutionary Corps.
These accounts allowed Iran to launder funds and trade oil outside the traditional banking system and sanctions.
Blessed Trust repeatedly raised internal alerts at the firm. When investigators eventually discovered the extent of funds going to Iran’s government, they flagged it to Binance’s top execs before they were fired weeks later.
Richard Teng has denounced the latest article published by the WSJ as “defamatory” and “damaging,” claiming it ignored the responses given by Binance’s client.
Teng demanded that the WSJ take down its article and make corrections “immediately” or else it might take “further action.”
Read more: Iran’s central bank stacked $507M USDT last year, report
Binance claimed, “While you solicited our client’s position, your failure to reflect our client’s responses is inconsistent with your ethical obligations to ‘remain fair, accurate and impartial,’ and suggests an agenda already set, which does not amount to responsible journalism.”
The crypto exchange refuted how the WSJ framed the firings, noted that it did remove the flagged accounts after they were discovered, and disputed any suggestion that Binance had some sort of access and control over the Blessed account.
Blumenthal wants Binance to cough up documents
Blumenthal’s inquiry has ordered Binance to submit a trove of documents related to the dubious accounts, the internal reports filed by compliance investigators, use of Binance by Iranians, the use of Tether and USD1 in connection to criminals, Binance’s use in illegal oil sales, and details regarding the firing of its investigators.
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