U.S. Senator Richard Blumenthal has opened a new front in scrutiny of Binance, launching a formal inquiry that accuses the exchange of enabling “large‑scale violations” of U.S. and international sanctions tied to Iran.
In a Feb. 24 letter to Binance co‑CEO Richard Teng, Blumenthal cites reporting from The Wall Street Journal, The New York Times and Fortune that alleges the exchange allowed roughly $1.7 billion in transfers connected to Iran—transactions the senator says reportedly supported Iranian‑linked terrorist groups and helped facilitate illicit Russian oil sales through a so‑called “shadow fleet” of tankers.
What the Senate is asking for
- The inquiry is being handled by the Senate Permanent Subcommittee on Investigations (PSI) as a preliminary probe.
- Blumenthal has requested extensive documentation from Binance on its potential role in Iranian money‑laundering, dealings with sanctioned entities, and broader compliance practices.
- The company has been asked to produce materials by March 6, 2026.
Allegations based on internal reporting
The media reports that prompted the probe describe internal Binance reviews identifying two partners—Hexa Whale and Blessed Trust—as intermediaries that allegedly helped launder funds and enable trade with Iranian government‑linked entities. Those reviews reportedly flagged about 2,000 accounts tied to Iranian entities, even as U.S. banking restrictions and Binance’s public policies prohibit Iranian users.
Documents published by the outlets allegedly show Binance personnel warned that Hexa Whale may have been financing groups such as Yemen’s Houthi movement. Internal investigators also reportedly traced crypto transfers to wallets linked to Iran’s Islamic Revolutionary Guard Corps (IRGC) and payments to crew members on vessels said to be part of Russia’s sanctions‑evading oil fleet.
Claims of inaction
Blumenthal’s letter says Binance failed to act on these warnings. According to the senator, internal investigators recommended stronger “know your customer” controls and suggested banning seafarers connected to the shadow fleet—measures the letter says were rejected. The inquiry also alleges Binance granted VIP status to Hexa Whale despite suspected use of falsified documents and links between Hexa Whale personnel and Blessed Trust trading.
Binance response and compliance metrics
Binance has strongly denied the allegations. In a Feb. 22 statement released ahead of the senator’s letter, the company said an internal review found “no evidence of violations of applicable sanctions laws” and rejected claims that it dismissed investigators for raising sanctions concerns.
Binance also points to what it says are concrete improvements since its 2023 settlement with U.S. authorities:
- Sanctions‑related exposure as a share of overall trading volume fell from 0.284% in January 2024 to 0.009% by July 2025 (a 96.8% decline, per the company).
- Transaction volume involving four major Iranian crypto exchanges declined from $4.19 million in January 2024 to $1.1 million in January 2026.
- Roughly one quarter of Binance’s global workforce is now reportedly dedicated to anti‑money‑laundering and sanctions compliance functions.
Market reaction
As the inquiry drew headlines, Binance’s native token BNB traded around $616, up roughly 5% in the past 24 hours amid a modest crypto market rebound.
What’s next
The PSI’s preliminary inquiry and Blumenthal’s document request set a tight timetable: Binance must respond by March 6, 2026. The materials could shape whether the probe escalates into a broader investigation or enforcement action, and they add to ongoing scrutiny of how crypto platforms police sanctions and illicit finance.
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