On Wednesday, a new investigation was launched into the operations of Binance after a Fortune report claimed the crypto exchange processed $1.7 billion in sanctioned transactions. The report alleged that the transactions involved Iranian entities and Russia’s “shadow fleet.” 

This has prompted US Senator Richard Blumenthal to launch an official investigation into the company’s compliance procedures. 

Senate Review Focuses on Binance’s Internal Oversight

Senator Blumenthal has confirmed in an official statement. In his statement, he confirmed that the investigation will cover Binance’s internal structure. He will also seek to understand how the company responded to the issues raised in the report by the company’s investigative team. 

Source: X

Senator Blumenthal asked Binance CEO Richard Teng to provide detailed records regarding the company’s internal structure. He requested to provide all documents related to the transactions mentioned in the report. 

According to a Fortune report, the exchange processed nearly $1.7 billion in transactions related to Iranian sanctions. The report also claimed some of the transactions are related to vessels in Russia’s shadow fleet.

According to the report, at least five employees from Binance’s compliance team were terminated after they spotted these transactions. The allegations raised concerns about the handling of internal red flags. There were also concerns about how the exchange was being overseen.

Also Read: Binance Cuts Sanctions Exposure 96% As Compliance Team Tops 1,500

Binance Reaffirms Compliance Efforts as Investigation Continues

The allegations have been denied by Binance. The company stated that, after conducting an investigation with the help of legal counsel, it did not find any evidence of violating sanctions. 

The exchange stated that it has improved its compliance procedures over the past few years. It also added that it has shut accounts due to sanctions violations. The exchange also said that it utilizes blockchain analytics in monitoring suspicious transactions.

The company stated that it has made several reforms after it entered into a settlement with U.S. regulators in 2023. The exchange said it has improved its compliance procedures. 

The exchange notes that it has made these improvements as part of a broader effort. The Senate probe adds new pressure to the exchange.

It also raises concerns about how the exchange manages compliance risks globally. Additional updates are expected as the inquiry progresses.

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