Good morning. Any bank will tell you that processing financial transactions is a tricky business that requires constant vigilance for fraud, hackers, regulatory compliance, and countless other challenges. In the wild world of crypto, doubly so.
That’s what makes Leo Schwartz and Ben Weiss’ latest investigation into Binance so striking. The crypto exchange, founded by the now-pardoned Changpeng Zhao, has been under scrutiny for weeks for firing internal investigators who had informed management about more than $1 billion that flowed through the exchange to Iran-linked wallets. (Binance has said the firings were unrelated and that the company maintains a rigorous compliance program, per its 2023 plea deal with the U.S. government over lack of effective anti-money laundering and sanctions programs).
The latest details reported by Schwartz and Weiss raise serious questions about how effective Binance’s compliance programs are. According to the report, $439 million in crypto tokens were transferred from a Binance VIP account registered to a 79-year old resident of China. The tokens were transferred to an outside wallet, with most of the funds then forwarded to other outside wallets later determined to be connected to sanctioned organizations linked to Iran like the Islamic Revolutionary Guard Corps.
