Binance undergoes DOJ probe after helping Iranian firms trade $8 billion under U.S. sanctions
Yahoo Finance reporter Jennifer Schonberger explains the Department of Justice probe investigating crypto exchange Binance for allowing Iranian firms to trade nearly $8 billion despite U.S. sanctions.
Video Transcript
RACHELLE AKUFFO: Well, crypto exchange Binance reportedly processing billions of dollars in trades for Iranian firms. That's despite US sanctions. Finance's Jen Schonberger joins us now with the details. Hey, Jen.
JENNIFER SCHONBERGER: Good afternoon, Rachelle. That's right. Crypto exchange Binance reportedly processing Iranian transactions in value of nearly $8 billion since 2018, despite US sanctions aimed at cutting Iran off from the global financial system. Reuters conducted an analysis with data from three firms that had access to Chainalysis reactor investigation software and found that some $7.8 billion of funds flowed between Binance and Iran's largest crypto exchange, Novacek.
3/4 of Iran's funds that pass through Binance were in a cryptocurrency called Tron. That gives users the option to conceal their identities, according to Reuters analysis. In a blog post today, Binance's head of global sanctions, Chagri Poyraz, wrote that as soon as Binance discovered that Iran-based crypto exchanges may have attempted to move crypto through Binance's exchange, the company, quote, "moved to freeze transfers, block accounts, and follow the protocols set up by our compliance team."
Poyraz went on to say, we immediately set up a task force to resolve the issue. Any failure of the system is unacceptable to us. And while Binance isn't a US company required to follow American law, we work hard to keep sanctioned individuals off our platform. Now the head of sanctions says Binance uses strong "know your customer" protocols and invests in technology to ensure that the people who should not be using Binance's exchange are not able to access their ecosystem, but admits the exchange is playing catch-up and that this is an industry wide issue.
Now, these new findings come as the US Department of Justice is pursuing an investigation into possible violations of money laundering rules by Binance. The Department of Justice did not immediately respond to Yahoo Finance for comment. And Treasury also declined to comment, saying it does not weigh in on potential violations of US sanctions. Guys.
RACHELLE AKUFFO: Well, certainly more scrutiny to come, I'm sure. A big thank you to our very own Jen Schonberger, thanks so much.
