In brief
- Senator Richard Blumenthal has opened an investigation into alleged sanctions violations at Binance.
- A Wall Street Journal report claimed that $1.7 billion flowed from Binance accounts to Iran-linked entities.
- Binance has denied wrongdoing and accused the WSJ of defamatory reporting.
U.S. Senator Richard Blumenthal (D-Conn), the top Democrat on the Senate Permanent Subcommittee on Investigations, has opened a preliminary inquiry into Binance following reports that the cryptocurrency exchange allowed $1.7 billion in transactions tied to Iranian entities and Russia’s sanctions-evading oil trade.
The probe follows reporting by The Wall Street Journal alleging that internal Binance investigators uncovered transfers from accounts on the platform to intermediaries connected to Iran, including entities linked to the Islamic Revolutionary Guards Corps and Yemen’s Houthi militants.
According to the report, two Hong Kong-based partners—Hexa Whale and Blessed Trust—acted as conduits for some of the transactions. The articles said investigators identified roughly 2,000 accounts associated with Iranian entities despite Binance’s stated ban on Iranian users, and that some compliance staff who raised concerns were later suspended or dismissed.
Binance has denied the allegations. In a tweet posted Tuesday, CEO Richard Teng accused the WSJ of publishing “defamatory claims” about the company’s compliance program and said the outlet failed to acknowledge corrections provided by the exchange.
In a legal letter to the newspaper, Binance said it wants the “false information” corrected immediately and the “defamatory imputations retracted.”
Binance has said its sanctions exposure is minimal, that it detected and reported suspicious activity, and that it found no evidence of violations in its own review. The company said accounts linked to the reported transactions were removed and that it stopped working with Blessed Trust in January.
Binance is the world’s largest cryptocurrency exchange by trading volume, serving tens of millions of users globally and offering trading in hundreds of digital tokens. The company has sought to position itself as having strengthened its compliance controls in recent years following heightened scrutiny from U.S. regulators.
Binance and compliance
The latest allegations come after Binance pleaded guilty in 2023 to violating U.S. anti-money-laundering laws and sanctions requirements, agreeing to pay $4.3 billion in penalties and to exit the U.S. market. Founder Changpeng “CZ” Zhao was sentenced to four months in prison for his role in the violations. He was given a presidential pardon by Donald Trump in October last year.
That hasn’t stopped U.S. lawmakers taking an interest. In a letter to Teng dated Tuesday, Blumenthal wrote that “Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange,” allowing $1.7 billion in transfers to Iran.
He cited reports that internal compliance staff found that Hexa Whale and Blessed Trust facilitated laundering and trade with Iranian government entities, and that investigators traced cryptocurrency transfers to wallets associated with the Islamic Revolutionary Guards Corps as well as payments tied to Russia’s so-called shadow fleet of oil tankers.
“Binance appears to have ignored clear warning signs, knowingly allowed illicit accounts to operate, and even provided hands-on support to entities engaged in money laundering,” Blumenthal wrote. “…The scale of the newly revealed illicit transfers — uncaught until nearly two billion dollars flowed to sanctioned entities — and the unexplained firing of internal investigators call into question Binance’s compliance with American sanctions and banking laws.”
He also pointed to Binance’s ties to World Liberty Financial, a cryptocurrency venture associated with the family of President Donald Trump, suggesting the company has sought to influence policymakers while facing scrutiny.
The senator requested that Binance provide extensive records by March 6, 2026, including documents related to the activities of Hexa Whale and Blessed Trust, internal reports and communications concerning Iranian and Russian-linked accounts, records tied to the use of Tether and the USD1 stablecoin in potential sanctions evasion, and documentation surrounding the suspension or dismissal of compliance staff involved in the investigations.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
