Key Highlights
- CZ questioned the reliance on anonymous sources and argued Binance used third-party AML and blockchain analytics tools to monitor transactions.
- The controversy follows Binance’s 2023 $4.3 billion U.S. settlement and renewed scrutiny over its compliance and oversight practices.
Binance founder Changpeng Zhao (CZ) has pushed back against what he describes as “self-contradictory” allegations surrounding the exchange’s compliance practices.
His comments follow a Fortune report claiming that Binance fired senior investigators who allegedly uncovered potential sanctions violations tied to Iranian-linked entities.
Calling out the narrative
Without addressing specific internal details, Zhao questioned the internal logic of the claims in an X post on Friday. “If it were even true,” he suggested, one could just argue that employees were dismissed for failing to prevent the alleged activity.
He also highlighted the reliance on unnamed sources, warning that narratives built around anonymous or disgruntled individuals can be shaped to fit almost any storyline.
Zhao emphasized that he no longer runs Binance but said that during his tenure, the company routed transactions through multiple third-party anti-money laundering (AML) tools, the same systems widely used by law enforcement agencies.
Compliance under the spotlight
The controversy emerges against the backdrop of Binance’s 2023 settlement with U.S. authorities. The exchange agreed to pay $4.3 billion in fines after pleading guilty to violations involving anti-money laundering, know-your-customer controls, and sanctions compliance. Zhao himself stepped down as CEO and subsequently served four months in prison.
As part of that resolution, Binance entered a monitorship and pledged to strengthen oversight mechanisms.
The recent report alleges that internal investigators identified more than $1 billion in transactions involving entities linked to Iran between March 2024 and August 2025, routed through Tether on the Tron blockchain. It further claims several compliance team members were dismissed after surfacing their findings.
Binance has not publicly disclosed the reasons behind those departures.
Third-party tools and transaction monitoring
CZ’s defense centers on process. He stated that Binance historically relied on multiple independent AML and blockchain analytics providers to screen transactions.
His argument implies that if the alleged transactions went undetected or were not flagged in real time, the issue would not rest solely with Binance’s internal teams but also with the broader compliance ecosystem that includes external monitoring systems.
Hedging allegations
Zhao’s comments came after he rejected a resurfaced claim that Binance secretly made huge profits by hedging customer positions on rival platform BitMEX ahead of the March 2020 COVID-19 market crash.
The allegations, which he called “fake news,” claimed that Binance had traded on BitMEX and that the rumors were part of a larger trend of “FUD” (fear, uncertainty, and doubt) directed at the exchange.
Broader context
Since stepping down, Zhao has largely remained out of day-to-day operations, but his public defense signals sensitivity to claims that the exchange has backtracked on compliance commitments.
By calling the allegations “self-contradictory,” he is challenging not just the facts presented but the framing.
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