EXCLUSIVE: Binance Execs Hit Back At Billion Dollar Iran Terror Funding Allegations
Summary
Allegations & Response: Binance leaders refute media reports alleging sanction violations, emphasizing robust compliance, investigations, and cooperation with law enforcement.
Crypto Exchanges: The team underscores Binance’s regulated global footprint, ambition to serve 1 billion users, and institutional demand, effectively pitching well-regulated crypto exchanges as long-term winners.
AI: Executives highlight AI as the most exciting driver of compliance effectiveness, using it for fraud detection, transaction monitoring, and market surveillance with over 100 engineers dedicated to these tools.
Sanctions Controls: They detail strict KYC/KYB, screening, and offboarding procedures, noting multi-hop blockchain flows and acting quickly when authorities provide intelligence.
Regulatory Posture: Binance stresses its licensing across 21+ jurisdictions and end-to-end oversight by ADGM’s FSRA, positioning regulatory strength as a competitive moat.
Risk Management: The team denies intentional facilitation of sanctioned activity, citing post-notice investigations, user offboarding, and required disclosures as proof of effective controls.
Companies Mentioned: Discussion centers on Binance (private); other firms like Morgan Stanley and JPMorgan appear only as background, with no specific public tickers pitched.
Transcript
A series of extraordinary allegations have been made against Binance, the world's largest crypto exchange, over the last few weeks, starting with an article from Fortune magazine, and then the Wall Street Journal and New York Times both published similar articles on the same day earlier this week. Uh we're here to address these allegations with top executives from the company, Richard Tang, uh Noah Pearlman, and Astra Thai. And Richard Tang, as you know, is the co-CEO of Binance. And Noah Pman is the chief compliance officer. Astra is the global head of sanctions. Uh just a brief bio on all three panelists before we get started. Richard has over three decades of financial services and regulatory experience prior to joining Binance. He was the CEO of the financial services regulatory authority at Abu Dhabi Global Market and chief regulatory officer of the Singapore exchange and the director of corporate finance in the monetary authority of Singapore. Uh Noah has worked at Gemini prior to Binance, first as CCO and then as chief operating officer before starting in crypto. He was a managing director and the global head of financial crimes at Morgan Stanley. And uh prior to that, he was also uh involved with the uh DEA uh as an assistant um United States attorney for the Eastern District of New York. Uh Astra is Binance's global head of sanctions. Since late 2024, Astra has been dedicated to leading the day-to-day management of Binance's global sanctions compliance program. She has more than a decade of experience working in law firms and in-house helping companies manage sanctions and financial crime risk. Welcome to the show. Um, Richard, Astra, and Noah. I've had the pleasure of speaking with not too long ago. You can check out Noah's last interview with me down below. Link down below. Thank you for joining us today. Thank you. Um let's get started with the allegations themselves. Uh Richard, so maybe help us by clarifying what um has been the timeline of events over the last couple weeks. So uh as reported by the WSJ and the New York Times earlier this week, there's been $1.7 billion in flows to wallets on Binance linked to Iran associated and sanctioned entities. We'll talk about that in more detail in just a bit. Um, and following uh these investigations, there's been the suspension and firing of at least four employees in Binance tied to the investigations. So, from these reports in these articles, it looks like there was an investigation and then Binance dismissed several employees at Binance involved with these investigations. And then you posted on X um a letter from Binance's uh legal council uh basically asking the Wall Street Journal and the New York Times to correct certain inaccuracies in the report. So walk us through what these inaccuracies are and how these allegations came about in the first place. >> Sure. So first of all David, thanks for having us. Right. So but before I answer all those detailed question I wanted to set the stage of how how and what we have built as a compliance program. I spent as you mentioned decades as financial services regulator. So I know what good looks like in compliance and this is something that we take very very seriously because as you know Binance pay a heavy price for our compliance shop for and we have since taken great pains and a lot of resources to get our compliance into where it is today under Noah's leadership on that front. So this false misleading reporting they are very unfortunate. They they do a great injustice to the compliance program appeal they do a great injustice to the hard work put in by our,500 compliance staff working tirelessly around the clock to make sure that the platform is safe, our users are safe. We here and work very closely with law enforcement agencies on that front and they account for 25% of of our workforce. Right? So these are things that we take it very seriously. But I wanted to stress a few points at the outset and some of those relates to what you mentioned. We ref with reference to the cases that you mentioned. We have employees departed because they breached data handling policies and these are some of the things that we at Binance have zero tolerance for because for example things like insider trading, breaches of data protection, they impact user protection and they introduce vulnerabilities on the platform. So we have to take all these things very seriously. Investigators will not and will never be let go from Binance because of escalating compliance concern. To the contrary, we need investigators to do a good job at investigating and escalate them quickly so that we can safeguard the platform and other users is something that we demand. And the truth is and we share those with the journalists and they fail to report. They come out with very biased one-sided reporting. The truth was the investigation continued after the departure of the said investigators who are disfronted. >> Um and we completed those investigation. We offboarded the relevant entities. We cooperated with the relevant law enforcement agencies and comply with our disclosure obligations as we always do and we will continue to do so. Right? So there's there are various claims they are forced on that front. they failed to really give the context of what happened. So we have completed the investigation uh as I mentioned we continue to work very closely with law enforcement agencies on that front on claims relating to the alleged transfer on the Iranian link entities and large dollar figures that's being cited. Let me again put across that the facts are as follow none of the Binance users were sanctioned. None of the wallets where the funds were received were known to be associated with any sanctioned entities at the time of transaction and our review did not find any Binance users directly transacting with the sanctions person or wallet. >> So there are a lot of safeguard within the platform. We do not allow users or transactions from sanctioned jurisdiction. Estra can elaborate on those and we have strong controls to prevent such transaction. We conduct KYC of our users and continue review them to make sure that we do not allow sanctioned individuals or corporates to conduct activities on our platform and we conduct transaction screening for any transfer in transfer out from the platform against third party industry solutions that's used by financial institutions worldwide and we do not allow any transfer attributable to sanctions person. Right? So all these are facts and we have provided them. But the very irresponsible media coverage suggested very reckless indifference on our part uh discrediting our compliance or sanction obligations and these are holy forced right so let me stress again we do not let go of people investigators whether it's in the past or going forward because of they doing their job it will never happen right so let me stress a lot of this we have built a very strong robust compliance program that serve to protect our users our platform and we work very proactively on with law enforcement agencies to continue to to detect and fight crimes. Maybe just set that as a stage on the outset. >> Yes. And uh co former CEO CZ also took to Twitter or X uh to comment on this uh when it came out. This is actually the uh snippet from Fortune magazine uh that reported the same thing a couple weeks ago. I don't know any details or who, but just read the article. It's self-contradictory. You can put a negative narrative on anything by talking to anonymous source who isn't happy or paid to FUD. I don't run Binance anymore, but as XCO, I know they run every transaction through multiple third party anti-moneyaundering tools. So, a lot of this has to do with what you just spoke about. Uh these individuals were dismissed for um I guess individual reasons, but I want to just comment on the articles themselves and how these extraordinary claims came to be. So, a group of internal investigators at the giant cryptocurrency exchange Binancees from the New York Times made a series of startling discoveries last year. People in Iran had gained access to more than 1,500 accounts on the Binance platform over the previous year. About $1.7 billion had flow from two Binance accounts to Iranian entities with links to terrorist groups, a possible violation of global sanctions. This is according to investigators internally who reported them to top executives. and the New York Times reviewed uh these company records. Um first of all, can you just address whether or not these numbers are true? 1500 accounts on the Binance platform and 1.7 billion flowed from two Binance accounts to Iranian entities linked to terrorism. >> Yeah. Um thanks and David. Nice nice to be on again. Um >> to see you. >> Yeah. So, uh look, I'm going to answer those questions. Uh but let me let me also sort of set the stage a bit. Um this is very personal to me. Um and uh you know we've spent the last three years since I've been here really uh dedicated full energy to building the a great program and improving all improving everything. And when we have false accusations like this uh it really strikes not just at me but at all the men and women here that are working to to really improve compliance. Turning to the to the allegations uh the specific allegations. One of the challenges and one of the real frustrations by the reporting is that uh it appears that the former employees may have shared internal working documents um that reflected preliminary observations which were part of an ongoing process, not our final findings or conclusions. That's part of the way a process works. I mean, as you mentioned at the asset, I'm a former federal prosecutor, former counsel to law enforcement agency. Um this is sort of standard operating procedure. investigators um they get suspicion, they do an investigation, it's robust, but then that needs to be challenged and vetted. So, for example, the New York Times mentions 1,500 accounts. Well, the investigation showed that those 1500 accounts, there was no conclusion that those were Iranian accounts. They were frequently using VPNs, virtual private networks. VPN usage alone does not uh establish sanctions exposure. We have strict KYC and compliance procedures in place. We prohibit usage from sanctioned countries. Uh VPN is something that we look at, but in and of itself, the fact that these user were using VPN does not mean uh that they were Iranian accounts. Uh as Richard said at the outset, uh these preliminary investigations were brought to us by investigators and then our our process kicked in. We did a very thorough investigation. That investigation was ongoing. At the time the employees left, that had not been finished. It had not been completed. So, a lot of the allegations uh that they raised in documents that I assume were seen by uh the press had not been finally vetted uh and we hadn't made uh official conclusions. And the idea that we would dismiss uh employees for raising something, it's just it's actually preposterous on its face as evidenced by the fact that the investigation continued, the relevant accounts were offboarded uh and relevant reporting was made. >> Fair enough. So you're you're denying the claim that there were 1500 accounts linked to Iran terrorist groups and $1.7 billion uh flowing to these terrorist groups. That's that's false. >> David, thanks for for giving me the opportunity to answer that uh that question directly. So that's what I can say about that. Binance didn't knowingly provide accounts to users in Iran and certainly we didn't knowingly facilitate transactions involving sanctioned entities in Iran or otherwise. Um as we said once Binance was notified by external sources uh of a potential concern we undertook a thorough investigation uh it led to the offboarding of relevant users. Um to me this shows that the compliance program uh was working. That being said uh there is some nuance here. uh Binance had Binance had no reason to know at the time of the transactions uh whether funds went from Binance indirectly to certain wallets and certainly we wouldn't have allowed that uh to happen uh if information were available at the time of those transactions. >> Uh Astro I do want to ask you some questions on uh sanctions in just a minute but just going back to Richard for a minute just maybe explain to the public watching this why there are internal investigators in the first place at Binance. what is their role and why are these investigations taking place? Maybe let's just back up here. >> Yeah. So, David, before I address that, I just want to express my deep appreciation to Noah and the compliance team for all the hard work and the heavy lifting. Uh he has really transform and uplifted our compliance program. Noi and myself work very very closely on that front and he knows that I he I he has my full support in terms of resourcing headc count processes procedures to get us in a top-notch shape on that front. So I really appreciate for what he has done. But let me let me address right. So as Noah mentioned right in the course of our work um we do receive a lot of intelligence. We do share intelligence with law enforcement agencies. In fact we gotten a lot of commendation letters because we go beyond the due our duty of call uh which many other exchange don't do. Right? So just just for instance on the sanctions front right I think many people may not appreciate this but we have devoted so much time energy on this and if you look at data sets right on that front we in terms of sanction related exposure on our exchange right has reduced dramatically uh by 97% from 2024 to 2025 and we compare much better compared to the 10 other global exchanges on that front. We work with law enforcement agencies to confiscate 131 million in illicit funds in 2025 alone. Right? So all those are facts but people do who are in blockchain know that we cannot bring that figure down to zero because we can't stop people from transferring in and that's the nature of blockchain right but once they are transferred in and if I mean we do as Dan mentioned we do KYC we do transaction monitoring and if there anything that's suspicious we then work with law enforcement agencies we have the ability to freeze and confiscate those funds right which we have done uh and working very closely law enforcement agencies on that front. So we do have an investigation team and so let me just walk through through with you a typical case right. So any financial institution and qualified compliance person can tell you that you know whether it's a bank whether it's financial institutions we we work daily to try to identify possible suspicious transaction whether is through different type of intel through screening records through KYC scanning etc and we will start investigating those right and at the outset you know you're just gathering all the information uh normally the investigators have some hypothesis that may be wrong, maybe disprove later on, right? And then work through that. There could be proper cost, there's no cost, right? When there's no cost, right? Um, you know, you keep the users, you may ask for additional information, but where there proper cost, then you offboard the users. You then work with law enforcement agencies to see whether you they can bring relevant actions because they have the statutory powers to do so. and then they can pursue actions against uh the possible persons for any suspicion on that front. So that's the role of the investigation team internally but the compliance function span across I mean,500 people spend across. So the investigation team is just one function within the compliance function but the entire team work tirelessly as as an outfit as a team to make sure that we keep our platform safe on that front. >> Astra, so back to the sanctions, can you just explain how uh Binance cooperates with authorities on monitoring activity in sanctioned regions including Iran and Russia for example. So, you know, I'm assuming uh maybe, correct me if I'm wrong, but users in those countries are allowed to use Binance in some way or are they not? Just generally speaking, if I were an Iranian citizen, I want to use Binance, what is a procedure for that? >> Yeah. So, u um so, uh uh let me just get to the your first question about if this is Iranian users. So uh Bance prohibits providing services to residents in Iran. Um that means like regardless of nationality, right? It could be Iranian national, it could be a non- Iranian national as long as they are residents in Iran. Bance prohibits providing services to residents in Iran. Um period. Uh the second one you're talking about Iranian nationals. So if a Iranian nationals reside outside of Iran, move to a different country, say reside in Europe, uh Bazi is not prohibited from uh providing services to all these users. Um and this is also specified in our terms of use. Our terms of use prohibit providing services to uh certain jurisdictions which is currently include uh Cuba, Iran, North Korea, the regions of Crimea, the so-called Luhanska People's Republic and the so-called Daska People's Republic. Um those are the regions Bance um um prohibits providing services to. So it's not attached to nationality. >> Okay. Uh Noah, can you just comment broadly on the compliance measures that Binance takes internally to monitor and flag illicit activity overall? What are some of the red flags that automatically trigger your system? >> Yeah. Um so, uh just echoing what Richard and Astra said, um and I'll preface it by saying it's a it's the the program is one of constant improvement. uh any chief compliance officer who tells you, "Oh, their program is perfect or doesn't have room to enhancement is just is not being truthful." Um uh we all we always can improve and there's always issues. Of course, we've got, as Richard said at the outset, uh robust KYC and KYB. Uh so when those people have to verify where they are, if you if you if you indicate that you're uh Iran as country of residence, it's you're automatically blocked. Of course, we've got sanctions name screening uh an ongoing screening. So, the whole host of controls that we have that we test that we validate and then we look uh we we look to improve them. Uh so that's you know um sort of one example and also just to to echo I think uh something that both Richard and Astra said about US users you we don't have US users on the platform uh and we've got an extremely robust procedure and process around ensuring that and testing that um uh both for individuals and for companies that may have a US nexus. Um it's uh a cross uh a cross enterprise effort to ensure that we are upholding that and that's one of the things we take very seriously. >> Okay. and uh Binance >> I I I just wanted to add the point because I'm not quite sure how sophisticated and informed your your viewers are because >> those are very technical answers right so in a nutshell whatever we have adopted is in line with what international financial institutions adopt on residents or sanctioning countries right these are in line with global standards in line with what other financial institutions institution does and we we do that very robustly so I I I do hope that the nuances and the details are not lost on that front. >> Okay. Uh as a well let's say someone were a user of Binance outside of those sanctioned regions. I think they may be wondering well what happens to my personal information after I KYC. How do you vet whether or not my information is being sent to the authorities versus somebody who is a little more suspicious for example, right? Um what what is your process for cooperating with the authorities and submitting client information to the authorities? Who do you decide or how do you decide whose information to to to to submit uh or not? Uh no one you want to take a stab at this? >> Sure. Um let let me start. So first of all as there's there was some reporting I can't remember which of the articles maybe all of them uh that we have changed our um approach to cooperating with law enforcement. Um it's absolutely not the case. We're as committed as ever uh to cooperating appropriately with law enforcement around the world. Um uh Richard mentioned some of the stats uh before, so I won't repeat those. Uh but we respond uh one of the things I should say is that as a uh with our licenses around the world, responding means you have to respond appropriately um and follow the appropriate protocols. Um for example, there's something uh called a mutual legal assistance treaty which may govern how you provide information. So users can be assured that we follow the appropriate protocols and we're not just handing out data um uh inappropriately. Uh we respect and follow the appropriate legal reporting obligations along with the relevant data privacy and protection laws uh that govern information uh which how it's shared with authorities and that varies from jurisdiction to jurisdiction. We have a fantastic data privacy team that that provides us advice and guidance on that. Um but both Binance, our subsidiaries, we have a policy and a culture of cooperation and compliance with all lawful information requests and legal inquiries. Um same as any traditional financial institution and that that philosophy and culture uh has not changed. >> Okay. Uh going back to Astra for a minute, Astra, I wanted to I just want to point uh your attention to the New York Times article once more. Uh so it alleges that there's workarounds that Iranian entities have made. So they've according to this report uh used offshore accounts or perhaps Hong Kong based entities to bypass certain Binance measures. So the most significant link the investigators discovered here according to this report between Binance accounts and Iranian entities involved a Hong Kong business called Blessed Trust. Blessed Trust is owned by five companies incorporated in the B British Virgin Islands and the Cayman Islands according to Hong Kong records. It also has a business relationship with Binance. Uh Hexa Whale is another one that was identified based in Hong Kong had used Binance to spend $400 million in crypto wallets tied to Iranian entities according to the documents. Can you just comment on Hexa Whale and Blessed Trust and the relationship that these entities have had with Binance? >> Sure. Uh before I just uh answer this question, I just want to I think it's worth like setting the stage just like highlighting uh you know the nature of the blockchain just as uh you know uh Richard also mentioned you know blockchain uh transactions normally are multihop transactions. What does multihop means? That means that there will be multiple steps. Uh if you see for all these like transaction pattern um so that means like a found moving through several uh wallet before reaching some like a final destination. Uh for example money from the wallet A1 could be seen through uh wallet uh flowing through the wallet A2. We maybe with some money we're staying wallet A2 and then remaining going to wallet to A3 and then through the similar way and know through multiple steps finally go to the recipient wallet which we we can just quote it maybe A12 and A a15 right and then in between there there will be multiple intermediary wallet A2 to A5 if you treat them as one cohort and a A6 to A1 you can treat it as another like a cohort and And the thing I want to flag out is all these intermediate wallet are not a sanction wallet at the time of the transactions. Right? Um and then when you're looking at that um and uh the the final and the final receiving wallet A12 and a a A15 they have been identified by the law enforcement as the sanction wallet after all these multi-step transaction occurred. So the thing is like the exchange say Binance providing services to wallet A1 and then uh and other wallet um would not be able to know the funds is coming from wallet A1 have flowing through so many steps uh to the end wallet A12 to a A15 at the time of the transaction because at that moment even we use the industry recognized downchain tools all these tool will not be able to flag any trans all any of these transaction for review. Just to go back to the point is the end wallet hasn't been designated or identified as sanctioned at the time of the transaction and actually in the cases happened after all these multi-step transaction uh occurred. So the same logic we can just apply to the cases we are talking about here. >> Uh Richard you have anything to add? Yes. >> Yeah. Yeah. So so let just let me explain uh in very simple terms, right? So I I will give you an example. For example, I think what Estra is saying is this, right? So a person was investigated uh just take a bank. So a bank identify suspicious transaction, right? Whether is through intelligence, whether it's through the bank screening, uh continue screening etc etc and then it start investigating it. then offboard the users and then work with law enforcement agencies to bring relevant actions against the person and then thereafter the person is sanctioned. Right? The bank cannot be faulted for not for having all these prior transaction before reasonable suspicions arise or proper information was received to to enable proper screening to take place right or or you know proper intelligence to take place and proper investigation could take place. In fact, the compliance program is working right because of that reason because the investigation take place. You can assess the risk. You offboard the person. You report them to the law enforcement agencies. They take actions and then the person was sanctioned. Right? All these are part and parcel of what financial institution does on a day-to-day basis. Right? So I think Astra you know went through a very technical things to say you know there are multiloops uh this uh you know multiple layers away um those transfer are not from Binance directly to any sanctioned persons but through multiple layers of wallet from wallet A to wallet B to wallet C wallet D etc and then subsequently some of the other wallets were sanctions right so I think those are just example but in a very nut in a very simple nutshell we just have to highlight that this This is what financial institutions go through on a day-to-day basis to make sure that we work very closely with law enforcement agencies to detect and fight illicit crimes. And uh just dovetailing off of that, Noah, just from a regulators perspective and law enforcement's perspective, how would the Department of Justice or let's say uh the Financial Crimes uh enforcement network in the US actually determine if there was prior intent to send money through a wallet to let's say an intermediary to then somehow finance terrorism? And I mean, if I accidentally, let's say, sent a couple hundred dollars to a wallet um that I had no idea was linked to an Iranian terrorist organization and later my account got frozen and that was just pure coincidence or an accident or I was just sent I was just given the wrong address, wallet address information. I mean, is my account all of a sudden flagged? I mean, how some some the authorities have to prove somehow that I'm linked to these terrorist organizations, right? What what is a step there? >> Yeah, I mean, it's a great question, David, and I'm not sure exactly how uh you know, how law enforcement or regulators will take a look uh in any individual case, but generally, you're right. I mean, they're going to look at sort of knowing and intention. Um, and in this case, look, it's it's probably not surprising that since the news broke, uh, the teams internally here have been tirelessly going over and revetting every step that we did. Uh, and I am 100% confident that, uh, not only did we take the right steps once we know once we were notified, but even before that, um, that there is zero intention here to violate any rules or regulations. um we didn't find any evidence that Binance users uh directly transactioned um uh had direct transactions with sanctioned persons or wallets but importantly there was no intent there's been no uncovery of any intent of anybody here to subvert the process to subvert the investigative process so I think if uh regulators uh prosecutors anyone who wants to take a look and ask information we will have uh we will be open uh you know consistent with our legal obligations and I think that the story to be told here is that uh Binance did the right thing once it was on notice and that there was no um intent to do the wrong thing. No intent to cover anything up and it's why at the outset I started why I find this you know so personally um why this really hits me and the entire department personally because we were so committed to doing the right thing um and we have been for many years and so to have sort of this sort of one-sided coverage that doesn't reflect that um it's both it's it's inaccurate um and and it's personally upsetting. Well, can you just comment on this paragraph here from this article? Over roughly two of the past years, the investigators discovered $1.2 billion in crypto had flowed from blessed to trust Binance account to Iranian linked entities. According to the documents, the investigators found ties between those entities and crypto wallets controlled by Iran's revolutionary guard corps, which has been designated a terrorist organization. Uh found ties is pretty ambiguous. What does that mean? >> No, exactly. And it goes to what we we talked about at the at the top of the hour, which is that this this reporting is based on preliminary reports which have uh a lot of assumptions that were not concluded, a lot of um suspicions that were not finally vetted. In short, the report wasn't done. Um and so uh this information and uh is based on on preliminary reporting. Um two other things to add. Um both Astra and Richard talked about um this idea of uh hops and links. Um and if you go out enough hops, you can probably link anything to um you know, you know, uh you you can make you can make links that really are not supported by uh by direct evidence. So um that's that's you know, sorry, go ahead there. No, I mean look, I think somebody reading this might ask you, well, everything conducted on chain is not difficult to track. I mean, unless they're using privacy tokens, but even then there's methods that law enforcement uh, you know, could use. So, what would be the process if investigators or law enforcement were approaching Noah and say, "Hey, can you look into these $1.2 2 billion in crypto funds that we suspect may be linked to the uh you know the revolutionary guard core of Iran like what what would be the procedure there given that everything's already on chain >> yeah if if that were to happen and and and we are on notice from lumpers of course we look at it and then we take appropriate action I mean I think we talked about how uh uh we've been you know once we were notified of problematic behavior we took appropriate steps uh offboarded appropriate users made appropriate reporting But is that is that Binance's responsibility to link one wallet to another or is that really the jurisdiction of the DOJ to take your information and and and parse that through? I mean, who who you know what who who who should be doing what here? >> Yeah. Yeah. It's a it's it look we we can only know what we can know. I mean, we can't take proactive uh activity if if wallets haven't been sanctioned yet. Um, and as Richard said, if they're sanctioned after the fact, then we can react to that, but we can't be held responsible uh for blocking funds to wallets that at the time uh were not sanctioned. >> Okay. Uh, Asper, do you have anything to add? Uh the the thing I want to just like add is like once we get the intelligence uh from the law enforcement, we act upon that immediately and then take the you know conducting investigation and pro process the investigation in in accordance with compan policies and procedure and then took the appropriate action uh including like a boarding certain account. So that's you know the the the highlight would be we act upon information we took the action. Um >> um as a user of Binance somebody might be wondering if following these allegations or events um there may be changes to KYC um just practically speaking can you can you comment on that? Um, look, we will take a look. Uh, as I mentioned, we're in constant evolution um, uh, of the program, constant enhancements, and so certainly we'll take a look. Uh, I mean, it's already we've already taken a look. Uh, and you always do a postmortem when you have events, whether they're accurate or not. What are the allegations here? Is there anything we can improve? Uh, and we will improve it. But in terms of users, um, I don't anticipate, uh, any direct sort of user impact on the retail level in terms of the KYC processes. It's they're very robust right now. Um but uh you know as I said we'll we'll we're always looking to enhance and see do we have gaps? Can we can we improve our processes and procedures? Um and we'll take a look there. This was a user on X that responded to CZ's post that I showed earlier. So were the fired investigators using the same thirdparty AML anti-moneyaundering tools that Binance relies on or did they have access to something internal that flagged Iran related activity? Uh, no. Noah, do you want to try to answer this question? >> Yeah. So, I, you know, the answer I don't know what the is specifically the investigators um were using here, but they had the same tools. Uh, you know, we use a variety of tools both internal and uh industrywide respected vendors. We don't rely on just one vendor. So, we have lots of tools at our disposal. Um, uh, so yeah, so that that's how I would answer that one. >> Okay. Uh Richard, just from a broader strategy standpoint, after these allegations are made, uh is Binance planning to change its strategy of international reach, are you are you tightening the border, so to speak, on which countries to do business in or are you not changing anything at all? >> No, David. So I think unknown to many of your viewers, we went through a very comprehensive I mean, we are the most regulated platform globally, right? So you think about it, we are regulated in 20 more than 21 local jurisdiction. I'm currently in Japan. I just spoke at the GFTN event. We are we are regulated here. Uh but unlike other platforms and unlike other global platform, we are the only global platform that has a home regulator that's being regulated end to end, right? So the FSR from ADGM went through a very comprehensive exercise with us, right? Over the course of more than a year doing deep dive, understanding the operations, looking at our policies, procedures, etc., etc. and everything on the platform going from initial onboarding of new customers, right? Things like know your customers, know your business, KYC, KY to transaction monitoring to market surveillance to wallet storage to risk management to governance structure etc. So they they look at everything listings and they're comfortable and we are the only global platform that's licensed in such a manner without global liquidity regulated as well. Right? So I want to stress that and that took a lot of effort uh to to bring about and as Noah mentioned he's very proud of that achievement. So are we at the Binance team and that's something that we will continue to do. Our ambition is to serve 1 billion users. There's no change in that. We will continue with our global footprint. We already work very closely with many global regulators and we intend to work with many many more. Uh we want to roll more products for users. Uh as Noah mentioned compliance is a journey is a evolving journey. The standards are always changing and being raised all the time. We will keep up with that. We have to make all the necessary investment on that front. But end of the day we are very confident of the platform. We will continue to make investments in the areas that we need to make. We will continue to make enhancement in areas that we need to make but you know this is in my view the best-in-class infrastructure and we will need to continue to push ahead in terms of supporting our users globally. Uh so Richard can you just comment on the change in personnel? I mean, uh, maybe the investigators that were dismissed were done so for reasons outside of this case, but has the company looked into replacing them or changing the structure of the internal investigation team uh, following these allegations or perhaps have there been changes in the last couple of months that the public should be aware of? >> No. So, as an organization, we're always evolving. It's not only the compliance department, right? So with the advent of AI and we are a tech company and we are very heavy users and investors into the blockchain technology as well >> the mandate I mean you you see JP Morgan and you see all the different big institutions all coming out to say that the workforce is being restructured uh dramatically right on that front because you know just just take very simple function compliance function with the usage of AI you can do a lot of things like fraud detection using AI by going seeing through documents to make sure whether it's any fraudulent documents you can do transaction monitoring market surveillance very effectively using AI so the nature of the workforce is being restructured in a big way whether it's on compliance or in many of the our other department so we need to look at that to look at where we need to add talent and where can we rely on technology right so the restructuring is continuing throughout the organization not only in ours but throughout the world and in many financial institutions and we will continue to make sure that with all this restructuring we become even better in terms of e efficiency effectiveness but what is not being compromised and we will never compromise is our upholding global standards we working with global regulators on that front upholding the rule of law uh including on nonl but sanctions and counterterrorism financing etc etc and those are extreme extremely important and we continue to invest very heavily. >> Uh I think let's close off on what uh Binance is just working on right now uh in light of these allegations and uh what's next for strategy uh compliance and the sanctions team. Starting with you Richard. So uh I saw that you tweeted on your own social media a you know uh a letter from your council your legal counsel. I'll just share this in the screen. following the reports of the Wall Street Journal and the New York Times. Um I mean what are you what are you hoping to achieve at this point in time? What's ideal for you here? No. So you see there are various falsehood there are various in incination. They are totally misleading and wrong. We need to make that right. We need to put out a very robust respond otherwise you do great injustice to our compliance team and to the hard workload that we have put in place. Right. They they insinuated various things to say that we fire our investigators for raising concerns. That is force. Right. Purely force on that front. Again, after the investigators after the investigator left, we we continue with the investigation. We completed the investigation. We offboarded the users. We notified the law enforcement agencies on that front. Right? So there are many things that we need proper correction on otherwise viewers and people around the world will have wrong perception on that front and all these reports aim to mislead uh there's a lot of grievances uh that is because of all this falsehood being brought around. So we need to fight that and we need to raise the cost for all this wrong reporting that's being promulgated. But on the on the on the compliance front, >> it's not only on the compliance on the different controls within Binance. We continue to invest greatly as I as we as I mentioned, we spend millions of dollars a year just on a compliance function alone. We continue to add expertise to the team, enhance the quality, enhance the program. Noah can can discuss a lot more on that. But as I mentioned you know the governance structure of Binance is such that we make sure that the compliance functions has unfettered access to the power of directors you know get proper resourcing to do what they want and the fact is u we don't interfere in many of these compliance decision right there's no business interference there's no executive interference on what they need to do to discharge their responsibility and to uphold the rule of law >> no I think we've already discussed some of the compliance changes that you may or may not be making. It's always evolving like you said, but uh what I mean what what changes would you like >> to see uh throughout this year? Um that that may or may not either a help the internal investigators um you know uh do their job or perhaps uh make it easier for the DOJ and other you know entities, law enforcement agencies around the world to cooperate with Binance. Yeah. Um, so let me let me answer that and then also I just want to go back to the allegation uh about the ships because I just think it's an important clarification. But let me let me first answer your question, David. So look, um, to me the most exciting um, art of compliance uh, and I've been in the space, you know, over 20 years is artificial intelligence. Richard talked about AI and it's not just because, oh, you know, you can reduce headcount or you can be faster. It's because you can be more effective. Um, and one of the incredible things about working at Binance is the tech resources and just the the super brain power we have working on these issues. We have over a 100 engineers that are just devoted to compliance functions. Uh, and so one of the things that we're really looking to do in the next year to improve our processes is how can we use AI not just to be quicker but to be more accurate so we can really identify the risk, help law enforcement and regulators around the world. Um, it's something that the board of directors is supportive of, that Richard and Cole are supportive of. Uh, and we we have full support to do that, and it's something that I'm that I'm super excited about. Just going back just to the Russian allegation because I think it's more Astra talked about it generally, but I want to actually specifically deny that allegation. We received information about that Russian um ship issue. We conducted a thorough review uh across all the accounts. the vessels referenced were not sanctioned and the transaction activity itself uh did not constitute a sanctions violation. So we complied with all legal uh and reporting obligations. Um and that's one of the things that's so frustrating about the article the suggestion that we >> was what you just said in the internal report that supposedly the New York Times and the Wall Street Journal used to reference when writing that article or is that just completely fabricated here? I I don't know what was in the I don't I I haven't seen what the what the journal Times relied on, but I do know that we provided the media with our review and response and and these things were just not not included. So, I mean, it's just an example that um that insinuation or actually allegation that we permitted sanctual activity and that it's just it's incorrect. >> Astra, uh the the uh sanctions uh committee must be, you know, busy making changes as well. uh can you comment on you know what's ahead for for your department here? >> Um as uh as Richard and Noah mentioned earlier um ban sanction program is working effectively. It's a very effective program. We have strong controls. Um so that this also has been evidenced by what has been discussed about uh the allegations. Um so we actound the intelligence received from law enforcement uh immediately and then took the uh proper actions including upboarding the user um um um immediately. So that that's basically a testament to our effective control program. Um uh does it mean that there's nothing to be enhanced from there? Um no I think for all these compliance officer we know uh all the program all the compliance program uh could be enhanced. So for going forward, we are continuously um enhance our controls to make our program more effective. >> All right, Richard, I'll give you the last word before we close off here. So, you know, let's just take your personal sentiment on what's been going on over the last couple weeks with these allegations. What was your first reaction when you saw the reporting in media? and you know as a leader of co-CEO of Binance um how are you trying to make Binance a more robust on a compliance basis but be also competitive in the global crypto exchange world presumably Binance is not the only exchange you know facing similar scrutiny here but uh you're trying to stay competitive so let's start from your initial response to what you're doing next strategy-wise No, we we have been doing the same things in the past two to three years. We have been spending a lot of time, effort. Uh it's not something that we are building overnight, right? The team has continued to expand uh to about,500 compliance staff now spending millions of dollars a year and we keep building that out, right? To make sure it's robust and I mean my background as you know is a financial services regulator. I believe with our global reach and size and being the most regulated exchange in the world will allow us that competitive edge that nobody else has right because going forward if you look at the landscape. We have more and more institutions coming through they demand high standards of compliance right and we are working with many global institutions on that front right. So we we make all these investments we want to make sure and we have the ability to do so we have the financial strength to do so right and many of the other smaller exchanges can't do it right we can as Noah mentioned we have the tech resources we have the compliance resources we have the risk management resources to make sure that we make sure all these are important modes for us right uh and competitive advantage for us and we intend to make use of of them to the fullest advantage and to do so we need to continue investing in all these important functions right as we continue to bring the next billion users in including many institutions, sovereign wealth funds, corporates, family offices and accredited investors. So that is going to be our ambition and our goal and we continue to invest very heavily. >> All right. Well, thank you very much uh Richard, Noah, and Astra. I appreciate your time and uh clarifying some things here for us and uh we'll uh stay tuned for more updates. But uh thank you for your time for now and um don't forget to like and subscribe and don't forget to follow Binance link down below for more information as updates come in.
EXCLUSIVE: Binance Execs Hit Back At Billion Dollar Iran Terror Funding Allegations
Summary
Transcript
A series of extraordinary allegations have been made against Binance, the world's largest crypto exchange, over the last few weeks, starting with an article from Fortune magazine, and then the Wall Street Journal and New York Times both published similar articles on the same day earlier this week. Uh we're here to address these allegations with top executives from the company, Richard Tang, uh Noah Pearlman, and Astra Thai. And Richard Tang, as you know, is the co-CEO of Binance. And Noah Pman is the chief compliance officer. Astra is the global head of sanctions. Uh just a brief bio on all three panelists before we get started. Richard has over three decades of financial services and regulatory experience prior to joining Binance. He was the CEO of the financial services regulatory authority at Abu Dhabi Global Market and chief regulatory officer of the Singapore exchange and the director of corporate finance in the monetary authority of Singapore. Uh Noah has worked at Gemini prior to Binance, first as CCO and then as chief operating officer before starting in crypto. He was a managing director and the global head of financial crimes at Morgan Stanley. And uh prior to that, he was also uh involved with the uh DEA uh as an assistant um United States attorney for the Eastern District of New York. Uh Astra is Binance's global head of sanctions. Since late 2024, Astra has been dedicated to leading the day-to-day management of Binance's global sanctions compliance program. She has more than a decade of experience working in law firms and in-house helping companies manage sanctions and financial crime risk. Welcome to the show. Um, Richard, Astra, and Noah. I've had the pleasure of speaking with not too long ago. You can check out Noah's last interview with me down below. Link down below. Thank you for joining us today. Thank you. Um let's get started with the allegations themselves. Uh Richard, so maybe help us by clarifying what um has been the timeline of events over the last couple weeks. So uh as reported by the WSJ and the New York Times earlier this week, there's been $1.7 billion in flows to wallets on Binance linked to Iran associated and sanctioned entities. We'll talk about that in more detail in just a bit. Um, and following uh these investigations, there's been the suspension and firing of at least four employees in Binance tied to the investigations. So, from these reports in these articles, it looks like there was an investigation and then Binance dismissed several employees at Binance involved with these investigations. And then you posted on X um a letter from Binance's uh legal council uh basically asking the Wall Street Journal and the New York Times to correct certain inaccuracies in the report. So walk us through what these inaccuracies are and how these allegations came about in the first place. >> Sure. So first of all David, thanks for having us. Right. So but before I answer all those detailed question I wanted to set the stage of how how and what we have built as a compliance program. I spent as you mentioned decades as financial services regulator. So I know what good looks like in compliance and this is something that we take very very seriously because as you know Binance pay a heavy price for our compliance shop for and we have since taken great pains and a lot of resources to get our compliance into where it is today under Noah's leadership on that front. So this false misleading reporting they are very unfortunate. They they do a great injustice to the compliance program appeal they do a great injustice to the hard work put in by our,500 compliance staff working tirelessly around the clock to make sure that the platform is safe, our users are safe. We here and work very closely with law enforcement agencies on that front and they account for 25% of of our workforce. Right? So these are things that we take it very seriously. But I wanted to stress a few points at the outset and some of those relates to what you mentioned. We ref with reference to the cases that you mentioned. We have employees departed because they breached data handling policies and these are some of the things that we at Binance have zero tolerance for because for example things like insider trading, breaches of data protection, they impact user protection and they introduce vulnerabilities on the platform. So we have to take all these things very seriously. Investigators will not and will never be let go from Binance because of escalating compliance concern. To the contrary, we need investigators to do a good job at investigating and escalate them quickly so that we can safeguard the platform and other users is something that we demand. And the truth is and we share those with the journalists and they fail to report. They come out with very biased one-sided reporting. The truth was the investigation continued after the departure of the said investigators who are disfronted. >> Um and we completed those investigation. We offboarded the relevant entities. We cooperated with the relevant law enforcement agencies and comply with our disclosure obligations as we always do and we will continue to do so. Right? So there's there are various claims they are forced on that front. they failed to really give the context of what happened. So we have completed the investigation uh as I mentioned we continue to work very closely with law enforcement agencies on that front on claims relating to the alleged transfer on the Iranian link entities and large dollar figures that's being cited. Let me again put across that the facts are as follow none of the Binance users were sanctioned. None of the wallets where the funds were received were known to be associated with any sanctioned entities at the time of transaction and our review did not find any Binance users directly transacting with the sanctions person or wallet. >> So there are a lot of safeguard within the platform. We do not allow users or transactions from sanctioned jurisdiction. Estra can elaborate on those and we have strong controls to prevent such transaction. We conduct KYC of our users and continue review them to make sure that we do not allow sanctioned individuals or corporates to conduct activities on our platform and we conduct transaction screening for any transfer in transfer out from the platform against third party industry solutions that's used by financial institutions worldwide and we do not allow any transfer attributable to sanctions person. Right? So all these are facts and we have provided them. But the very irresponsible media coverage suggested very reckless indifference on our part uh discrediting our compliance or sanction obligations and these are holy forced right so let me stress again we do not let go of people investigators whether it's in the past or going forward because of they doing their job it will never happen right so let me stress a lot of this we have built a very strong robust compliance program that serve to protect our users our platform and we work very proactively on with law enforcement agencies to continue to to detect and fight crimes. Maybe just set that as a stage on the outset. >> Yes. And uh co former CEO CZ also took to Twitter or X uh to comment on this uh when it came out. This is actually the uh snippet from Fortune magazine uh that reported the same thing a couple weeks ago. I don't know any details or who, but just read the article. It's self-contradictory. You can put a negative narrative on anything by talking to anonymous source who isn't happy or paid to FUD. I don't run Binance anymore, but as XCO, I know they run every transaction through multiple third party anti-moneyaundering tools. So, a lot of this has to do with what you just spoke about. Uh these individuals were dismissed for um I guess individual reasons, but I want to just comment on the articles themselves and how these extraordinary claims came to be. So, a group of internal investigators at the giant cryptocurrency exchange Binancees from the New York Times made a series of startling discoveries last year. People in Iran had gained access to more than 1,500 accounts on the Binance platform over the previous year. About $1.7 billion had flow from two Binance accounts to Iranian entities with links to terrorist groups, a possible violation of global sanctions. This is according to investigators internally who reported them to top executives. and the New York Times reviewed uh these company records. Um first of all, can you just address whether or not these numbers are true? 1500 accounts on the Binance platform and 1.7 billion flowed from two Binance accounts to Iranian entities linked to terrorism. >> Yeah. Um thanks and David. Nice nice to be on again. Um >> to see you. >> Yeah. So, uh look, I'm going to answer those questions. Uh but let me let me also sort of set the stage a bit. Um this is very personal to me. Um and uh you know we've spent the last three years since I've been here really uh dedicated full energy to building the a great program and improving all improving everything. And when we have false accusations like this uh it really strikes not just at me but at all the men and women here that are working to to really improve compliance. Turning to the to the allegations uh the specific allegations. One of the challenges and one of the real frustrations by the reporting is that uh it appears that the former employees may have shared internal working documents um that reflected preliminary observations which were part of an ongoing process, not our final findings or conclusions. That's part of the way a process works. I mean, as you mentioned at the asset, I'm a former federal prosecutor, former counsel to law enforcement agency. Um this is sort of standard operating procedure. investigators um they get suspicion, they do an investigation, it's robust, but then that needs to be challenged and vetted. So, for example, the New York Times mentions 1,500 accounts. Well, the investigation showed that those 1500 accounts, there was no conclusion that those were Iranian accounts. They were frequently using VPNs, virtual private networks. VPN usage alone does not uh establish sanctions exposure. We have strict KYC and compliance procedures in place. We prohibit usage from sanctioned countries. Uh VPN is something that we look at, but in and of itself, the fact that these user were using VPN does not mean uh that they were Iranian accounts. Uh as Richard said at the outset, uh these preliminary investigations were brought to us by investigators and then our our process kicked in. We did a very thorough investigation. That investigation was ongoing. At the time the employees left, that had not been finished. It had not been completed. So, a lot of the allegations uh that they raised in documents that I assume were seen by uh the press had not been finally vetted uh and we hadn't made uh official conclusions. And the idea that we would dismiss uh employees for raising something, it's just it's actually preposterous on its face as evidenced by the fact that the investigation continued, the relevant accounts were offboarded uh and relevant reporting was made. >> Fair enough. So you're you're denying the claim that there were 1500 accounts linked to Iran terrorist groups and $1.7 billion uh flowing to these terrorist groups. That's that's false. >> David, thanks for for giving me the opportunity to answer that uh that question directly. So that's what I can say about that. Binance didn't knowingly provide accounts to users in Iran and certainly we didn't knowingly facilitate transactions involving sanctioned entities in Iran or otherwise. Um as we said once Binance was notified by external sources uh of a potential concern we undertook a thorough investigation uh it led to the offboarding of relevant users. Um to me this shows that the compliance program uh was working. That being said uh there is some nuance here. uh Binance had Binance had no reason to know at the time of the transactions uh whether funds went from Binance indirectly to certain wallets and certainly we wouldn't have allowed that uh to happen uh if information were available at the time of those transactions. >> Uh Astro I do want to ask you some questions on uh sanctions in just a minute but just going back to Richard for a minute just maybe explain to the public watching this why there are internal investigators in the first place at Binance. what is their role and why are these investigations taking place? Maybe let's just back up here. >> Yeah. So, David, before I address that, I just want to express my deep appreciation to Noah and the compliance team for all the hard work and the heavy lifting. Uh he has really transform and uplifted our compliance program. Noi and myself work very very closely on that front and he knows that I he I he has my full support in terms of resourcing headc count processes procedures to get us in a top-notch shape on that front. So I really appreciate for what he has done. But let me let me address right. So as Noah mentioned right in the course of our work um we do receive a lot of intelligence. We do share intelligence with law enforcement agencies. In fact we gotten a lot of commendation letters because we go beyond the due our duty of call uh which many other exchange don't do. Right? So just just for instance on the sanctions front right I think many people may not appreciate this but we have devoted so much time energy on this and if you look at data sets right on that front we in terms of sanction related exposure on our exchange right has reduced dramatically uh by 97% from 2024 to 2025 and we compare much better compared to the 10 other global exchanges on that front. We work with law enforcement agencies to confiscate 131 million in illicit funds in 2025 alone. Right? So all those are facts but people do who are in blockchain know that we cannot bring that figure down to zero because we can't stop people from transferring in and that's the nature of blockchain right but once they are transferred in and if I mean we do as Dan mentioned we do KYC we do transaction monitoring and if there anything that's suspicious we then work with law enforcement agencies we have the ability to freeze and confiscate those funds right which we have done uh and working very closely law enforcement agencies on that front. So we do have an investigation team and so let me just walk through through with you a typical case right. So any financial institution and qualified compliance person can tell you that you know whether it's a bank whether it's financial institutions we we work daily to try to identify possible suspicious transaction whether is through different type of intel through screening records through KYC scanning etc and we will start investigating those right and at the outset you know you're just gathering all the information uh normally the investigators have some hypothesis that may be wrong, maybe disprove later on, right? And then work through that. There could be proper cost, there's no cost, right? When there's no cost, right? Um, you know, you keep the users, you may ask for additional information, but where there proper cost, then you offboard the users. You then work with law enforcement agencies to see whether you they can bring relevant actions because they have the statutory powers to do so. and then they can pursue actions against uh the possible persons for any suspicion on that front. So that's the role of the investigation team internally but the compliance function span across I mean,500 people spend across. So the investigation team is just one function within the compliance function but the entire team work tirelessly as as an outfit as a team to make sure that we keep our platform safe on that front. >> Astra, so back to the sanctions, can you just explain how uh Binance cooperates with authorities on monitoring activity in sanctioned regions including Iran and Russia for example. So, you know, I'm assuming uh maybe, correct me if I'm wrong, but users in those countries are allowed to use Binance in some way or are they not? Just generally speaking, if I were an Iranian citizen, I want to use Binance, what is a procedure for that? >> Yeah. So, u um so, uh uh let me just get to the your first question about if this is Iranian users. So uh Bance prohibits providing services to residents in Iran. Um that means like regardless of nationality, right? It could be Iranian national, it could be a non- Iranian national as long as they are residents in Iran. Bance prohibits providing services to residents in Iran. Um period. Uh the second one you're talking about Iranian nationals. So if a Iranian nationals reside outside of Iran, move to a different country, say reside in Europe, uh Bazi is not prohibited from uh providing services to all these users. Um and this is also specified in our terms of use. Our terms of use prohibit providing services to uh certain jurisdictions which is currently include uh Cuba, Iran, North Korea, the regions of Crimea, the so-called Luhanska People's Republic and the so-called Daska People's Republic. Um those are the regions Bance um um prohibits providing services to. So it's not attached to nationality. >> Okay. Uh Noah, can you just comment broadly on the compliance measures that Binance takes internally to monitor and flag illicit activity overall? What are some of the red flags that automatically trigger your system? >> Yeah. Um so, uh just echoing what Richard and Astra said, um and I'll preface it by saying it's a it's the the program is one of constant improvement. uh any chief compliance officer who tells you, "Oh, their program is perfect or doesn't have room to enhancement is just is not being truthful." Um uh we all we always can improve and there's always issues. Of course, we've got, as Richard said at the outset, uh robust KYC and KYB. Uh so when those people have to verify where they are, if you if you if you indicate that you're uh Iran as country of residence, it's you're automatically blocked. Of course, we've got sanctions name screening uh an ongoing screening. So, the whole host of controls that we have that we test that we validate and then we look uh we we look to improve them. Uh so that's you know um sort of one example and also just to to echo I think uh something that both Richard and Astra said about US users you we don't have US users on the platform uh and we've got an extremely robust procedure and process around ensuring that and testing that um uh both for individuals and for companies that may have a US nexus. Um it's uh a cross uh a cross enterprise effort to ensure that we are upholding that and that's one of the things we take very seriously. >> Okay. and uh Binance >> I I I just wanted to add the point because I'm not quite sure how sophisticated and informed your your viewers are because >> those are very technical answers right so in a nutshell whatever we have adopted is in line with what international financial institutions adopt on residents or sanctioning countries right these are in line with global standards in line with what other financial institutions institution does and we we do that very robustly so I I I do hope that the nuances and the details are not lost on that front. >> Okay. Uh as a well let's say someone were a user of Binance outside of those sanctioned regions. I think they may be wondering well what happens to my personal information after I KYC. How do you vet whether or not my information is being sent to the authorities versus somebody who is a little more suspicious for example, right? Um what what is your process for cooperating with the authorities and submitting client information to the authorities? Who do you decide or how do you decide whose information to to to to submit uh or not? Uh no one you want to take a stab at this? >> Sure. Um let let me start. So first of all as there's there was some reporting I can't remember which of the articles maybe all of them uh that we have changed our um approach to cooperating with law enforcement. Um it's absolutely not the case. We're as committed as ever uh to cooperating appropriately with law enforcement around the world. Um uh Richard mentioned some of the stats uh before, so I won't repeat those. Uh but we respond uh one of the things I should say is that as a uh with our licenses around the world, responding means you have to respond appropriately um and follow the appropriate protocols. Um for example, there's something uh called a mutual legal assistance treaty which may govern how you provide information. So users can be assured that we follow the appropriate protocols and we're not just handing out data um uh inappropriately. Uh we respect and follow the appropriate legal reporting obligations along with the relevant data privacy and protection laws uh that govern information uh which how it's shared with authorities and that varies from jurisdiction to jurisdiction. We have a fantastic data privacy team that that provides us advice and guidance on that. Um but both Binance, our subsidiaries, we have a policy and a culture of cooperation and compliance with all lawful information requests and legal inquiries. Um same as any traditional financial institution and that that philosophy and culture uh has not changed. >> Okay. Uh going back to Astra for a minute, Astra, I wanted to I just want to point uh your attention to the New York Times article once more. Uh so it alleges that there's workarounds that Iranian entities have made. So they've according to this report uh used offshore accounts or perhaps Hong Kong based entities to bypass certain Binance measures. So the most significant link the investigators discovered here according to this report between Binance accounts and Iranian entities involved a Hong Kong business called Blessed Trust. Blessed Trust is owned by five companies incorporated in the B British Virgin Islands and the Cayman Islands according to Hong Kong records. It also has a business relationship with Binance. Uh Hexa Whale is another one that was identified based in Hong Kong had used Binance to spend $400 million in crypto wallets tied to Iranian entities according to the documents. Can you just comment on Hexa Whale and Blessed Trust and the relationship that these entities have had with Binance? >> Sure. Uh before I just uh answer this question, I just want to I think it's worth like setting the stage just like highlighting uh you know the nature of the blockchain just as uh you know uh Richard also mentioned you know blockchain uh transactions normally are multihop transactions. What does multihop means? That means that there will be multiple steps. Uh if you see for all these like transaction pattern um so that means like a found moving through several uh wallet before reaching some like a final destination. Uh for example money from the wallet A1 could be seen through uh wallet uh flowing through the wallet A2. We maybe with some money we're staying wallet A2 and then remaining going to wallet to A3 and then through the similar way and know through multiple steps finally go to the recipient wallet which we we can just quote it maybe A12 and A a15 right and then in between there there will be multiple intermediary wallet A2 to A5 if you treat them as one cohort and a A6 to A1 you can treat it as another like a cohort and And the thing I want to flag out is all these intermediate wallet are not a sanction wallet at the time of the transactions. Right? Um and then when you're looking at that um and uh the the final and the final receiving wallet A12 and a a A15 they have been identified by the law enforcement as the sanction wallet after all these multi-step transaction occurred. So the thing is like the exchange say Binance providing services to wallet A1 and then uh and other wallet um would not be able to know the funds is coming from wallet A1 have flowing through so many steps uh to the end wallet A12 to a A15 at the time of the transaction because at that moment even we use the industry recognized downchain tools all these tool will not be able to flag any trans all any of these transaction for review. Just to go back to the point is the end wallet hasn't been designated or identified as sanctioned at the time of the transaction and actually in the cases happened after all these multi-step transaction uh occurred. So the same logic we can just apply to the cases we are talking about here. >> Uh Richard you have anything to add? Yes. >> Yeah. Yeah. So so let just let me explain uh in very simple terms, right? So I I will give you an example. For example, I think what Estra is saying is this, right? So a person was investigated uh just take a bank. So a bank identify suspicious transaction, right? Whether is through intelligence, whether it's through the bank screening, uh continue screening etc etc and then it start investigating it. then offboard the users and then work with law enforcement agencies to bring relevant actions against the person and then thereafter the person is sanctioned. Right? The bank cannot be faulted for not for having all these prior transaction before reasonable suspicions arise or proper information was received to to enable proper screening to take place right or or you know proper intelligence to take place and proper investigation could take place. In fact, the compliance program is working right because of that reason because the investigation take place. You can assess the risk. You offboard the person. You report them to the law enforcement agencies. They take actions and then the person was sanctioned. Right? All these are part and parcel of what financial institution does on a day-to-day basis. Right? So I think Astra you know went through a very technical things to say you know there are multiloops uh this uh you know multiple layers away um those transfer are not from Binance directly to any sanctioned persons but through multiple layers of wallet from wallet A to wallet B to wallet C wallet D etc and then subsequently some of the other wallets were sanctions right so I think those are just example but in a very nut in a very simple nutshell we just have to highlight that this This is what financial institutions go through on a day-to-day basis to make sure that we work very closely with law enforcement agencies to detect and fight illicit crimes. And uh just dovetailing off of that, Noah, just from a regulators perspective and law enforcement's perspective, how would the Department of Justice or let's say uh the Financial Crimes uh enforcement network in the US actually determine if there was prior intent to send money through a wallet to let's say an intermediary to then somehow finance terrorism? And I mean, if I accidentally, let's say, sent a couple hundred dollars to a wallet um that I had no idea was linked to an Iranian terrorist organization and later my account got frozen and that was just pure coincidence or an accident or I was just sent I was just given the wrong address, wallet address information. I mean, is my account all of a sudden flagged? I mean, how some some the authorities have to prove somehow that I'm linked to these terrorist organizations, right? What what is a step there? >> Yeah, I mean, it's a great question, David, and I'm not sure exactly how uh you know, how law enforcement or regulators will take a look uh in any individual case, but generally, you're right. I mean, they're going to look at sort of knowing and intention. Um, and in this case, look, it's it's probably not surprising that since the news broke, uh, the teams internally here have been tirelessly going over and revetting every step that we did. Uh, and I am 100% confident that, uh, not only did we take the right steps once we know once we were notified, but even before that, um, that there is zero intention here to violate any rules or regulations. um we didn't find any evidence that Binance users uh directly transactioned um uh had direct transactions with sanctioned persons or wallets but importantly there was no intent there's been no uncovery of any intent of anybody here to subvert the process to subvert the investigative process so I think if uh regulators uh prosecutors anyone who wants to take a look and ask information we will have uh we will be open uh you know consistent with our legal obligations and I think that the story to be told here is that uh Binance did the right thing once it was on notice and that there was no um intent to do the wrong thing. No intent to cover anything up and it's why at the outset I started why I find this you know so personally um why this really hits me and the entire department personally because we were so committed to doing the right thing um and we have been for many years and so to have sort of this sort of one-sided coverage that doesn't reflect that um it's both it's it's inaccurate um and and it's personally upsetting. Well, can you just comment on this paragraph here from this article? Over roughly two of the past years, the investigators discovered $1.2 billion in crypto had flowed from blessed to trust Binance account to Iranian linked entities. According to the documents, the investigators found ties between those entities and crypto wallets controlled by Iran's revolutionary guard corps, which has been designated a terrorist organization. Uh found ties is pretty ambiguous. What does that mean? >> No, exactly. And it goes to what we we talked about at the at the top of the hour, which is that this this reporting is based on preliminary reports which have uh a lot of assumptions that were not concluded, a lot of um suspicions that were not finally vetted. In short, the report wasn't done. Um and so uh this information and uh is based on on preliminary reporting. Um two other things to add. Um both Astra and Richard talked about um this idea of uh hops and links. Um and if you go out enough hops, you can probably link anything to um you know, you know, uh you you can make you can make links that really are not supported by uh by direct evidence. So um that's that's you know, sorry, go ahead there. No, I mean look, I think somebody reading this might ask you, well, everything conducted on chain is not difficult to track. I mean, unless they're using privacy tokens, but even then there's methods that law enforcement uh, you know, could use. So, what would be the process if investigators or law enforcement were approaching Noah and say, "Hey, can you look into these $1.2 2 billion in crypto funds that we suspect may be linked to the uh you know the revolutionary guard core of Iran like what what would be the procedure there given that everything's already on chain >> yeah if if that were to happen and and and we are on notice from lumpers of course we look at it and then we take appropriate action I mean I think we talked about how uh uh we've been you know once we were notified of problematic behavior we took appropriate steps uh offboarded appropriate users made appropriate reporting But is that is that Binance's responsibility to link one wallet to another or is that really the jurisdiction of the DOJ to take your information and and and parse that through? I mean, who who you know what who who who should be doing what here? >> Yeah. Yeah. It's a it's it look we we can only know what we can know. I mean, we can't take proactive uh activity if if wallets haven't been sanctioned yet. Um, and as Richard said, if they're sanctioned after the fact, then we can react to that, but we can't be held responsible uh for blocking funds to wallets that at the time uh were not sanctioned. >> Okay. Uh, Asper, do you have anything to add? Uh the the thing I want to just like add is like once we get the intelligence uh from the law enforcement, we act upon that immediately and then take the you know conducting investigation and pro process the investigation in in accordance with compan policies and procedure and then took the appropriate action uh including like a boarding certain account. So that's you know the the the highlight would be we act upon information we took the action. Um >> um as a user of Binance somebody might be wondering if following these allegations or events um there may be changes to KYC um just practically speaking can you can you comment on that? Um, look, we will take a look. Uh, as I mentioned, we're in constant evolution um, uh, of the program, constant enhancements, and so certainly we'll take a look. Uh, I mean, it's already we've already taken a look. Uh, and you always do a postmortem when you have events, whether they're accurate or not. What are the allegations here? Is there anything we can improve? Uh, and we will improve it. But in terms of users, um, I don't anticipate, uh, any direct sort of user impact on the retail level in terms of the KYC processes. It's they're very robust right now. Um but uh you know as I said we'll we'll we're always looking to enhance and see do we have gaps? Can we can we improve our processes and procedures? Um and we'll take a look there. This was a user on X that responded to CZ's post that I showed earlier. So were the fired investigators using the same thirdparty AML anti-moneyaundering tools that Binance relies on or did they have access to something internal that flagged Iran related activity? Uh, no. Noah, do you want to try to answer this question? >> Yeah. So, I, you know, the answer I don't know what the is specifically the investigators um were using here, but they had the same tools. Uh, you know, we use a variety of tools both internal and uh industrywide respected vendors. We don't rely on just one vendor. So, we have lots of tools at our disposal. Um, uh, so yeah, so that that's how I would answer that one. >> Okay. Uh Richard, just from a broader strategy standpoint, after these allegations are made, uh is Binance planning to change its strategy of international reach, are you are you tightening the border, so to speak, on which countries to do business in or are you not changing anything at all? >> No, David. So I think unknown to many of your viewers, we went through a very comprehensive I mean, we are the most regulated platform globally, right? So you think about it, we are regulated in 20 more than 21 local jurisdiction. I'm currently in Japan. I just spoke at the GFTN event. We are we are regulated here. Uh but unlike other platforms and unlike other global platform, we are the only global platform that has a home regulator that's being regulated end to end, right? So the FSR from ADGM went through a very comprehensive exercise with us, right? Over the course of more than a year doing deep dive, understanding the operations, looking at our policies, procedures, etc., etc. and everything on the platform going from initial onboarding of new customers, right? Things like know your customers, know your business, KYC, KY to transaction monitoring to market surveillance to wallet storage to risk management to governance structure etc. So they they look at everything listings and they're comfortable and we are the only global platform that's licensed in such a manner without global liquidity regulated as well. Right? So I want to stress that and that took a lot of effort uh to to bring about and as Noah mentioned he's very proud of that achievement. So are we at the Binance team and that's something that we will continue to do. Our ambition is to serve 1 billion users. There's no change in that. We will continue with our global footprint. We already work very closely with many global regulators and we intend to work with many many more. Uh we want to roll more products for users. Uh as Noah mentioned compliance is a journey is a evolving journey. The standards are always changing and being raised all the time. We will keep up with that. We have to make all the necessary investment on that front. But end of the day we are very confident of the platform. We will continue to make investments in the areas that we need to make. We will continue to make enhancement in areas that we need to make but you know this is in my view the best-in-class infrastructure and we will need to continue to push ahead in terms of supporting our users globally. Uh so Richard can you just comment on the change in personnel? I mean, uh, maybe the investigators that were dismissed were done so for reasons outside of this case, but has the company looked into replacing them or changing the structure of the internal investigation team uh, following these allegations or perhaps have there been changes in the last couple of months that the public should be aware of? >> No. So, as an organization, we're always evolving. It's not only the compliance department, right? So with the advent of AI and we are a tech company and we are very heavy users and investors into the blockchain technology as well >> the mandate I mean you you see JP Morgan and you see all the different big institutions all coming out to say that the workforce is being restructured uh dramatically right on that front because you know just just take very simple function compliance function with the usage of AI you can do a lot of things like fraud detection using AI by going seeing through documents to make sure whether it's any fraudulent documents you can do transaction monitoring market surveillance very effectively using AI so the nature of the workforce is being restructured in a big way whether it's on compliance or in many of the our other department so we need to look at that to look at where we need to add talent and where can we rely on technology right so the restructuring is continuing throughout the organization not only in ours but throughout the world and in many financial institutions and we will continue to make sure that with all this restructuring we become even better in terms of e efficiency effectiveness but what is not being compromised and we will never compromise is our upholding global standards we working with global regulators on that front upholding the rule of law uh including on nonl but sanctions and counterterrorism financing etc etc and those are extreme extremely important and we continue to invest very heavily. >> Uh I think let's close off on what uh Binance is just working on right now uh in light of these allegations and uh what's next for strategy uh compliance and the sanctions team. Starting with you Richard. So uh I saw that you tweeted on your own social media a you know uh a letter from your council your legal counsel. I'll just share this in the screen. following the reports of the Wall Street Journal and the New York Times. Um I mean what are you what are you hoping to achieve at this point in time? What's ideal for you here? No. So you see there are various falsehood there are various in incination. They are totally misleading and wrong. We need to make that right. We need to put out a very robust respond otherwise you do great injustice to our compliance team and to the hard workload that we have put in place. Right. They they insinuated various things to say that we fire our investigators for raising concerns. That is force. Right. Purely force on that front. Again, after the investigators after the investigator left, we we continue with the investigation. We completed the investigation. We offboarded the users. We notified the law enforcement agencies on that front. Right? So there are many things that we need proper correction on otherwise viewers and people around the world will have wrong perception on that front and all these reports aim to mislead uh there's a lot of grievances uh that is because of all this falsehood being brought around. So we need to fight that and we need to raise the cost for all this wrong reporting that's being promulgated. But on the on the on the compliance front, >> it's not only on the compliance on the different controls within Binance. We continue to invest greatly as I as we as I mentioned, we spend millions of dollars a year just on a compliance function alone. We continue to add expertise to the team, enhance the quality, enhance the program. Noah can can discuss a lot more on that. But as I mentioned you know the governance structure of Binance is such that we make sure that the compliance functions has unfettered access to the power of directors you know get proper resourcing to do what they want and the fact is u we don't interfere in many of these compliance decision right there's no business interference there's no executive interference on what they need to do to discharge their responsibility and to uphold the rule of law >> no I think we've already discussed some of the compliance changes that you may or may not be making. It's always evolving like you said, but uh what I mean what what changes would you like >> to see uh throughout this year? Um that that may or may not either a help the internal investigators um you know uh do their job or perhaps uh make it easier for the DOJ and other you know entities, law enforcement agencies around the world to cooperate with Binance. Yeah. Um, so let me let me answer that and then also I just want to go back to the allegation uh about the ships because I just think it's an important clarification. But let me let me first answer your question, David. So look, um, to me the most exciting um, art of compliance uh, and I've been in the space, you know, over 20 years is artificial intelligence. Richard talked about AI and it's not just because, oh, you know, you can reduce headcount or you can be faster. It's because you can be more effective. Um, and one of the incredible things about working at Binance is the tech resources and just the the super brain power we have working on these issues. We have over a 100 engineers that are just devoted to compliance functions. Uh, and so one of the things that we're really looking to do in the next year to improve our processes is how can we use AI not just to be quicker but to be more accurate so we can really identify the risk, help law enforcement and regulators around the world. Um, it's something that the board of directors is supportive of, that Richard and Cole are supportive of. Uh, and we we have full support to do that, and it's something that I'm that I'm super excited about. Just going back just to the Russian allegation because I think it's more Astra talked about it generally, but I want to actually specifically deny that allegation. We received information about that Russian um ship issue. We conducted a thorough review uh across all the accounts. the vessels referenced were not sanctioned and the transaction activity itself uh did not constitute a sanctions violation. So we complied with all legal uh and reporting obligations. Um and that's one of the things that's so frustrating about the article the suggestion that we >> was what you just said in the internal report that supposedly the New York Times and the Wall Street Journal used to reference when writing that article or is that just completely fabricated here? I I don't know what was in the I don't I I haven't seen what the what the journal Times relied on, but I do know that we provided the media with our review and response and and these things were just not not included. So, I mean, it's just an example that um that insinuation or actually allegation that we permitted sanctual activity and that it's just it's incorrect. >> Astra, uh the the uh sanctions uh committee must be, you know, busy making changes as well. uh can you comment on you know what's ahead for for your department here? >> Um as uh as Richard and Noah mentioned earlier um ban sanction program is working effectively. It's a very effective program. We have strong controls. Um so that this also has been evidenced by what has been discussed about uh the allegations. Um so we actound the intelligence received from law enforcement uh immediately and then took the uh proper actions including upboarding the user um um um immediately. So that that's basically a testament to our effective control program. Um uh does it mean that there's nothing to be enhanced from there? Um no I think for all these compliance officer we know uh all the program all the compliance program uh could be enhanced. So for going forward, we are continuously um enhance our controls to make our program more effective. >> All right, Richard, I'll give you the last word before we close off here. So, you know, let's just take your personal sentiment on what's been going on over the last couple weeks with these allegations. What was your first reaction when you saw the reporting in media? and you know as a leader of co-CEO of Binance um how are you trying to make Binance a more robust on a compliance basis but be also competitive in the global crypto exchange world presumably Binance is not the only exchange you know facing similar scrutiny here but uh you're trying to stay competitive so let's start from your initial response to what you're doing next strategy-wise No, we we have been doing the same things in the past two to three years. We have been spending a lot of time, effort. Uh it's not something that we are building overnight, right? The team has continued to expand uh to about,500 compliance staff now spending millions of dollars a year and we keep building that out, right? To make sure it's robust and I mean my background as you know is a financial services regulator. I believe with our global reach and size and being the most regulated exchange in the world will allow us that competitive edge that nobody else has right because going forward if you look at the landscape. We have more and more institutions coming through they demand high standards of compliance right and we are working with many global institutions on that front right. So we we make all these investments we want to make sure and we have the ability to do so we have the financial strength to do so right and many of the other smaller exchanges can't do it right we can as Noah mentioned we have the tech resources we have the compliance resources we have the risk management resources to make sure that we make sure all these are important modes for us right uh and competitive advantage for us and we intend to make use of of them to the fullest advantage and to do so we need to continue investing in all these important functions right as we continue to bring the next billion users in including many institutions, sovereign wealth funds, corporates, family offices and accredited investors. So that is going to be our ambition and our goal and we continue to invest very heavily. >> All right. Well, thank you very much uh Richard, Noah, and Astra. I appreciate your time and uh clarifying some things here for us and uh we'll uh stay tuned for more updates. But uh thank you for your time for now and um don't forget to like and subscribe and don't forget to follow Binance link down below for more information as updates come in.