U.S. senator opens probe into alleged Binance violations of Iran and Russia sanctions

The U.S. Senate has launched an official investigation into allegations that crypto exchange Binance violated sanctions related to Iran and Russia.

According to Bloomberg on the 24th (local time), Richard Blumenthal, the top Democrat on the Senate Permanent Subcommittee on Investigations, sent a letter to Binance co-CEO Richard Teng demanding documents on suspected fund transfers to entities linked to the Iranian government and on the circumstances surrounding the dismissal of internal investigative staff. Blumenthal said recent media reports have raised suspicions that as much as $2 billion may have flowed to sanctioned entities.

The Wall Street Journal recently reported that a team within Binance investigating indications that roughly $1 billion had moved to a network of Iran-backed armed groups was disbanded. The New York Times also reported that individuals in Iran accessed more than 1,500 accounts and that about $1.7 billion was transferred via two accounts to Iranian entities linked to terror-connected groups. Fortune previously reported on the 13th that Binance fired investigators who claimed to have found evidence of violations of Iran sanctions.

In the letter, Blumenthal said the lack of detection of large-scale transfers and the dismissal of internal investigative personnel raise serious questions about compliance with U.S. sanctions and financial laws.

Binance denied the allegations outright. In a statement, the company said it detected and reported suspicious activity and that its internal control systems are operating properly. It also said it maintains strict know-your-customer requirements and compliance procedures, and that there are no Iranian users on the platform.

Meanwhile, under a 2023 settlement with U.S. authorities, Binance admitted violations of anti-money-laundering obligations and agreed to pay more than $4 billion in fines. Former CEO Changpeng Zhao served four months in prison and was later pardoned. It was also mentioned that Binance provided technical support in the development of World Liberty Financial’s stablecoin USD1, owned by the Trump family and by U.S. Special Envoy for Russia Steve Witkoff. Blumenthal claimed about 85% of USD1 is held in Binance accounts.