Senator presses Binance over Iran ties
U.S. Senator Richard Blumenthal has launched a formal investigation into Binance, the world’s largest cryptocurrency exchange, following allegations that $1.7 billion flowed from Binance accounts to organizations linked with sanctioned Iranian entities and Russia’s oil “shadow fleet.” On Tuesday, Blumenthal, who serves as the ranking member of the Senate Permanent Subcommittee on Investigations, sent a letter to Binance CEO Richard Teng demanding internal records and documentation related to sanctions compliance and controls. The inquiry comes on the heels of reports citing internal Binance probes that allegedly uncovered transfers involving groups such as Yemen’s Houthi militants and Iran’s Islamic Revolutionary Guards Corps.
The senator’s letter specifically requested information about dealings with two Hong Kong-based entities—Blessed Trust and Hexa Whale—identified as intermediaries in moving funds to organizations connected with the Iranian government.
$1.7B transfer trail under scrutiny
At the center of the probe is an alleged $1.7 billion in transfers routed through Binance accounts in 2024 and 2025, with some funds reportedly ending up in wallets tied to sanctioned Iranian groups and Russian oil tankers. Internal investigators at Binance are said to have traced these transactions back to Chinese clients registered on the platform, raising concerns about how effectively Binance screens for sanctioned activity. According to cointelegraph.com, these findings were initially flagged by compliance staff who identified Blessed Trust—a Hong Kong company that acted as a vendor for Binance—before its accounts were terminated in January.
Binance reportedly ceased working with Blessed Trust after closing its accounts in January 2024.
On paper, Binance claims robust Know Your Customer (KYC) procedures and asserts that it does not serve Iranian users; however, internal reports suggest otherwise, pointing to possible gaps between policy and practice.
Internal whistleblowers allegedly sidelined
Multiple media outlets reported that several Binance compliance staff who raised concerns about these transactions were either fired or suspended. The Wall Street Journal alleged that five employees involved in investigating crypto transfers tied to sanctioned entities lost their jobs after flagging approximately $1 billion in questionable flows. In contrast, Binance maintains these employees resigned voluntarily and denies any retaliation or suppression of whistleblowers. The company has publicly challenged these reports as “categorically false,” even sending a legal demand for retraction to one major newspaper.
The fate of these investigators remains uncertain amid ongoing disputes between Binance and the press.
Binance denies Iranian user presence
Binance has issued strong denials regarding the presence of Iranian users on its platform. In communications with U.S. authorities and public statements, CEO Richard Teng insisted that an internal review found no evidence of violations of applicable sanctions laws or regulations tied to the described transactions. Rachel Conlan, a spokesperson for Binance, told media outlets that a comprehensive report is being prepared for submission to the U.S. Justice Department by February 25.
Despite these assurances, Senator Blumenthal’s inquiry asks for detailed compliance records covering not only recent years but also previous periods when Changpeng Zhao was still CEO—a period during which Binance admitted guilt in violating federal anti-money-laundering statutes.
Why it matters: practical impact
The latest congressional probe adds fresh scrutiny just months after Binance agreed in November 2023 to pay $4.3 billion in penalties and exit the U.S. market as part of a settlement over anti-money-laundering failures. Changpeng Zhao subsequently stepped down as CEO and served four months in prison before receiving a pardon from President Donald Trump—a rare outcome for financial crime cases at this scale.
For U.S.-based crypto users and global regulators alike, this investigation could set new precedents for how digital asset platforms are held accountable for cross-border sanctions enforcement. With allegations ranging from $1 billion to $1.7 billion in illicit flows involving sanctioned countries, lawmakers are signaling zero tolerance for gaps between stated compliance policies and actual transaction monitoring practices.
Whether concrete evidence emerges from Blumenthal’s probe or not, the episode underscores persistent challenges facing crypto exchanges operating at global scale—where even terminated vendor relationships like Blessed Trust can become flashpoints for regulatory intervention.
What could move the market
If Binance submits its full report to the U.S. Justice Department as planned on February 25, any immediate findings or actions disclosed by authorities could trigger market reactions; however, whether the report will confirm or refute the alleged $1.7 billion in transfers to Iran-linked entities remains unclear.