11 Democratic senators serving in the US Senate Banking, Housing and Urban Affairs Committee officially called on the Department of Justice and the Department of Treasury to investigate the Iran-related transactions and some recent practices of Binance, one of the world’s largest cryptocurrency exchanges. Senators demanded a comprehensive investigation into whether the exchange complies with sanctions compliance checks and the terms of the federal settlement signed in 2023.
Allegations of Violation of Iran Sanctions and Proceeds of Crime
In the joint letter prepared by the senators, the allegations that have recently appeared in the media that Binance mediated the transfer of billions of dollars of digital money to Iran and terrorist-linked groups were highlighted. Accordingly, in 2023, Binance’s compliance teams determined that approximately $1.7 billion in digital assets were transferred to various entities, including the Iran-backed Houthi group and the Iranian Revolutionary Guard. It was also stated that a supplier of Binance made transactions worth more than 1.2 billion dollars to Iranian-related individuals and organizations, and that Iranian users accessed the platform through more than 1,500 accounts.
Relations Between Trump Family and Binance
In the written call, attention was also drawn to the recent cooperation between the cryptocurrency initiatives of US President Donald Trump and his family and Binance. In particular, the issues of supporting the stablecoin named USD1, issued by World Liberty Financial, supported by the Trump family, with incentives on the stock market, providing technological cooperation and receiving a $2 billion investment in this project were emphasized. In addition, the necessity of examining these relations impartially and in detail was emphasized, pointing to the pardon imposed by Trump after the prison sentence of former Binance CEO Changpeng Zhao last year.
Russia and Other International Risks
The senators emphasized that Binance has issued crypto-linked payment cards in the former Soviet geography and that these products can be used to evade sanctions against Russia’s financial system. In addition, Binance’s cooperation with Kyrgyzstan within the scope of the stablecoin and digital currency project was opened to discussion on the grounds that it could open the door to sanction risks.
The senators argued that weak financial crime safeguards at Binance pose a serious threat to national security and could facilitate terrorist groups and sanctioned actors’ access to the global financial system.
The letter also included concerns that exchange employees were fired after detecting suspicious transactions and that Binance was less transparent with law enforcement requests. It was shared that these practices contradict the obligations of the stock exchange within the scope of the agreement reached with the USA in 2023.
As a result of the settlement made with the US Department of Justice in 2023, Binance pleaded guilty to charges such as violating American sanctions laws and failure to prevent money laundering. The exchange had committed to pay a fine of over $4 billion and to implement significant compliance reforms in a controlled manner.
Senators stated that following the latest reports, the irregular transactions alleged on the platform call into question the effectiveness of the internal control mechanisms in place. In Binance’s settlement with the US Treasury Department’s Office of Foreign Assets Control, it was promised to implement systems to detect and prevent prohibited transactions. However, these allegations increased concerns that these commitments were not fully fulfilled.
A Binance spokesperson denied the allegations and claimed that suspicious activities were detected and reported to the authorities and that the allegations of retaliation against employees were untrue. The company stated that it continues to adhere to regulatory commitments within the scope of the 2023 settlement process.
