On Tuesday, Binance, the cryptocurrency exchange, pushed back against a Wall Street Journal article, calling it “false information” regarding the supposed firing of an employee who was looking into funds sent to sanctioned entities.
Richard Teng, Binance’s co-CEO, contended that the Journal reported inaccurately about their compliance protocols. He mentioned in an X post that even with efforts to clarify things, including a letter from the exchange’s attorney aimed at the press, the Journal still went ahead with what he termed “defamatory claims.” This letter parallels a recent situation where Binance faced similar accusations of dismissing an investigator who flagged concerns related to sanctions.
The Journal’s Monday piece suggested that certain investigators were let go and had uncovered $1 billion in transactions linked to “a network funding Iranian-backed terrorist groups.” It claimed access to Binance documents and insights from individuals acquainted with the exchange’s operations, asserting that the company had halted an internal investigation into those $1 billion transactions.
Binance’s Response on Staff Disciplinary Actions
A spokesperson from Binance stated that the investigators had resigned voluntarily, countering claims of them being fired or suspended for raising compliance concerns.
According to the article, a settlement from 2023 between Binance and various authorities, including the U.S. Department of Justice, indicated that “documents and individuals familiar with Binance’s operations suggested ongoing conduct that defied sanctions and anti-money laundering regulations.” It also mentioned that Binance’s founder, Changpeng “CZ” Zhao, had breached federal money laundering laws.
Moreover, the report highlighted that an additional $1.7 billion was transferred from Chinese users on Binance to groups supported by Iran, including Yemen’s Houthi militants. A subsequent article from the New York Times echoed these allegations.
Major U.S. newspapers reported that four individuals let go by Binance held compliance and market oversight positions. They concluded that the exchange had not sufficiently reported warnings about suspicious trading and possible policy breaches.
A Binance spokesperson informed CoinDesk that an internal investigation yielded no signs of violations regarding applicable sanction laws or the transactions mentioned. However, they clarified that no investigators had been let go for raising compliance issues, arguing that detecting and reporting suspicious activity showcases that their controls are functioning properly.
Rachel Conran, another spokesperson, indicated to the Times that an investigation is ongoing, with a comprehensive report slated to go to the U.S. Department of Justice by February 25.
In a blog post on Sunday, Binance mentioned, “Sanction-related risks are minimal.” They also expressed that the recent reports regarding their compliance efforts are, at best, misleading. The narrative relies on unfounded claims from disgruntled former employees and fails to accurately reflect the broader compliance processes in cryptocurrency exchanges.
