Binance employees find clues to illegal transactions – are fired

Shortly after US President Donald Trump pardoned the founder and former CEO of Binance, the cryptocurrency exchange has fired several employees who were investigating potentially illegal transactions to Iranian organizations. This is reported by the Wall Street Journal and the New York Times, citing internal documents. According to the reports, a total of 1.7 billion US dollars in cryptocurrency flowed into accounts belonging to Iranian organizations or sanctioned groups supported by Iran over the past two years. The dismissed employees were reportedly experts in sanctions and counter-terrorism. Chinese companies likely paid for Iranian oil with this money.

Little Interest in Clarification

The Wall Street Journal first recalls that Binance has committed to the US government to closely monitor transactions and prevent those that violate US sanctions. Following tips from the FBI and Israel, an internal report was prepared last August on a Hong Kong-based company that laundered money for Iran. Its access was then blocked and the US Department of Justice was informed. In total, this amounted to the equivalent of 500 million US dollars. However, the investigations were not concluded. Instead, another account was discovered that funneled significantly more cryptocurrency to Iranian actors. The reaction to this discovery, however, was entirely different.

The account reportedly belonged to another Hong Kong company called Blessed Trust and, unlike most on Binance, was marked as “internal”: access to it was severely restricted. To verify it, special permission was required from a team directly subordinate to the CEO. Blessed Trust reportedly exchanges money into cryptocurrency and vice versa for customers. The account was reportedly used to transfer more than one billion US dollars to a network of organizations subordinate to the Iranian Revolutionary Guard. There was even a hint that Binance employees had access to the account, the Wall Street Journal further writes.

At the end of September, Blessed Trust was contacted by Binance and attempted to explain the transactions. Later, Binance's management was informed about the proceedings, and on November 13, two employees from the investigation team were dismissed. A few days later, two more individuals announced internally that the investigations would continue, whereupon they also lost access to their workplaces and their jobs. Only a few weeks earlier, Trump had pardoned Changpeng Zhao (also known as CZ). The former Binance CEO had previously served a four-month prison sentence for offenses related to his cryptocurrency exchange. Its cooperation with US authorities had already been significantly reduced again, the newspaper further writes.

In Prison for Sanctions Evasion

Binance stated to the newspaper that the employees were not suspended or dismissed for formulating compliance concerns. They left the company “due to individual circumstances.” The investigations were continued, and the identified company was removed from the platform. However, this cannot be verified. At the same time, CZ was explicitly sentenced to prison for evading sanctions laws on his cryptocurrency exchange. After Trump took office, the US stock exchange regulator SEC dropped proceedings against Binance.

(mho)