TLDR
- Former Binance CEO Changpeng Zhao denied claims that the exchange fired investigators over Iran-linked transaction findings.
- Zhao called the allegations “self-contradicting” and argued the investigators should have prevented suspicious activity.
- Binance uses third-party anti-money laundering screening tools that are also utilized by law enforcement agencies.
- The report claimed Binance dismissed five investigators who flagged transactions involving Iranian-linked counterparties.
- The dismissed investigators had law enforcement backgrounds and worked on sanctions evasion and counter-terrorism investigations.
Former Binance CEO Changpeng Zhao has responded to a report claiming the crypto exchange dismissed investigators after discovering Iran-linked transactions. Zhao denied the allegations, calling them “self-contradicting.” He further explained that Binance uses third-party tools to screen transactions, including those from law enforcement.
Zhao’s comments came after Fortune published a report suggesting that members of Binance’s investigations team were let go. The investigators had flagged suspicious activities related to Iranian-linked counterparties on the platform. According to the report, the flagged transactions involved over $1 billion in transfers, mostly conducted via Tether’s USDT stablecoin.
Binance Faces Allegations of Dismissing Investigators
Fortune reported that Binance fired at least five investigators who had raised concerns about Iranian-linked transactions. These transactions reportedly took place over 18 months. The investigators, many of whom had law enforcement backgrounds, were said to have worked on cases of sanctions evasion and counter-terrorism financing.
The dismissed staff had reportedly raised alarms over transactions involving Iranian counterparties using USDT on the Tron blockchain. Zhao, however, pushed back against the claims, stating that if the investigators had identified such activity, they also should have prevented it from occurring in the first place.
Zhao also pointed to Binance’s use of multiple third-party anti-money laundering tools. These tools, he claimed, are the same ones used by law enforcement agencies to screen transactions for illicit activity. Binance, Zhao stressed, takes security and compliance seriously.
Investigation Allegations Surface After Binance’s 2023 Settlement
The timing of these allegations comes shortly after Binance settled with U.S. authorities. In 2023, Binance pleaded guilty to anti-money laundering and sanctions violations, agreeing to pay $4.3 billion in penalties. Zhao stepped down as CEO and served a four-month prison sentence as part of the settlement.
The allegations also coincide with an ongoing investigation into Iranian entities’ use of stablecoins. Reports from blockchain analytics firms suggest that Iranian-linked wallets are increasingly using stablecoins like USDT. These transactions are said to help bypass banking restrictions and facilitate international trade.
While the controversy continues, Binance maintains its commitment to complying with international regulations. However, the report has raised questions about the exchange’s internal procedures and its handling of flagged transactions.
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