Senator Blumenthal Launches Probe Into Binance Over Alleged Sanctions Evasion
U.S. Senator Richard Blumenthal (D-Conn.), the senior Democratic senator from Connecticut, has opened a formal investigation into Binance, the world’s largest cryptocurrency exchange by trading volume. The probe focuses on serious allegations that the platform enabled money laundering schemes and sanctions evasion tied to Iran and Russia’s shadow oil fleet.
Allegations of Illicit Transactions and Internal Compliance Failures
In a letter dated Tuesday addressed to Binance CEO Richard Teng, Senator Blumenthal cited investigative reports from major news outlets including The Wall Street Journal, The New York Times, and Fortune. These reports allege that Binance partners, specifically Hexa Whale and Blessed Trust, acted as intermediaries for transactions linked to Iranian government entities, terrorist groups like the Houthis, and Russia’s covert oil operations.
The senator’s letter details shocking figures from the reporting: Binance allegedly maintained approximately 2,000 accounts linked to Iran and facilitated nearly $2 billion in transfers despite internal warnings. More disturbingly, the letter claims the exchange suspended or fired compliance staff who raised red flags about these potential violations.
Context: A History of Regulatory Scrutiny
This investigation adds another layer to Binance’s turbulent regulatory history. In 2023, Binance and its founder, Changpeng Zhao, entered a guilty plea for processing more than $1 billion in transactions to sanctioned entities. The settlement required Binance to pay $4.3 billion in penalties and submit to an independent compliance monitor. Zhao subsequently stepped down as CEO and, after serving a prison sentence, received a presidential pardon from former President Donald Trump in October 2024.
Senator Blumenthal’s letter questions whether Binance’s current compliance culture has fundamentally changed since that plea. He also probes the exchange’s relationship with World Liberty Financial and presidential envoy Steve Witkoff, suggesting political connections may have influenced regulatory outcomes, including the dismissal of a lawsuit and Zhao’s pardon.
Binance’s Denial and the Path Forward
Binance has forcefully disputed the latest allegations. A company statement asserts that its exposure to Iran-linked activity has decreased by nearly 97% since January 2024. The exchange also denies terminating employees for raising compliance concerns, stating, “No sanctions violations were found, no investigators were fired for raising concerns, and Binance continues to meet its regulatory commitments.” The company has reportedly requested corrections to the recent media reports that formed the basis of the senator’s inquiry.
To advance his investigation, Senator Blumenthal has demanded a comprehensive set of records from Binance. These include documents on the suspected $2 billion in transactions, communications regarding the use of stablecoins like Tether (USDT) and USD1 in potential money laundering or terrorist financing, and internal records explaining the dismissal of compliance personnel who identified violations. The senator has set a firm deadline of March 6, 2025, for Binance to produce these materials.
The record must be clear.
No sanctions violations were found, no investigators were fired for raising concerns, and Binance continues to meet its regulatory commitments.
We’ve asked for corrections to recent reporting. pic.twitter.com/glA9bdGaw1
— Richard Teng (@_RichardTeng) February 16, 2026
