Binance denies allegations of firing employees for reporting Iranian transactions, addressing senators' concerns directly.
Background on the Inquiry
Binance, one of the world's largest cryptocurrency exchanges, has officially responded to an inquiry initiated by a group of 11 US senators. The inquiry, launched in February, centered on allegations of the exchange facilitating transactions with Iranian entities and the subsequent terminations of certain employees who raised these concerns.
Binance's Response to Allegations
In a letter addressed to US Senators Richard Blumenthal and Ron Johnson of the Permanent Subcommittee on Investigations, Binance denied the claims made in the media reports. Specifically, the exchange disputed the accounts published by the Wall Street Journal, New York Times, and Fortune, which suggested that Binance had fired employees who had reported that the company had processed over $1 billion in cryptocurrency transactions for entities linked to Iran, referred to as Hexa Whale and Blessed Trust.
Binance stated, "To our knowledge, no Binance account transacted directly with an Iran-based entity." This denial was part of a broader assertion that the reports were "demonstrably false, unsupported by credible evidence, and defamatory in several material respects."
Employee Terminations and Privacy Concerns
Regarding the claims of employee terminations, Binance provided a nuanced response. The exchange clarified that not all employees who raised the issue resigned voluntarily; rather, one employee was terminated for violating the company's privacy policy by sharing internal user information. Binance stressed, "Binance takes seriously the privacy of its users and has no tolerance for employees who violate that trust by sharing internal information externally. Binance also closely follows its labor and employment policies, and this employment action was no different."
Governmental Response and Previous Settlements
The letter from the 11 senators to Treasury Secretary Scott Bessent and Attorney General Pamela Bondi requested a response by March 13 regarding whether the government officials intended to investigate Binance. As of the time of the letter, neither Bessent nor Bondi had publicly commented on the matter.
It is worth noting that in 2023, Binance reached a significant settlement with US authorities, agreeing to pay $4.3 billion to resolve violations of sanctions and Anti-Money-Laundering laws. This settlement, which came with then-CEO Changpeng "CZ" Zhao stepping down and pleading guilty to a felony charge, led to a four-month prison term.
Recent Developments and Scrutiny
In October, US President Donald Trump issued a pardon for CZ, which legally allowed him to return to the leadership of Binance. Despite this, Zhao publicly stated that he would not return as CEO. This move by Trump has drawn scrutiny from lawmakers, particularly given that the deal involved the USD1 stablecoin issued by World Liberty Financial, a company backed by the president and his sons, which was used to settle a $2 billion investment in Binance. Many lawmakers have labeled the deal as corrupt.
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