Blumenthal Presses Binance for Records on Alleged $1.7 Billion Iran-Linked Transfers
What Prompted the Senate Inquiry?
Sen. Richard Blumenthal has opened a Senate probe into Binance following reports that $1.7 billion was transferred from accounts on the exchange to organizations linked to Iran, including Yemen’s Houthi militants. The inquiry follows coverage by The New York Times and other outlets citing internal Binance investigators who allegedly identified the transfers and were later dismissed.
Blumenthal, a top Democrat on the Senate Homeland Security Committee, sent a letter to Binance CEO Richard Teng requesting records tied to “the use of Binance by individuals in Iran” as well as documents related to the suspension and firing of compliance staff. The Connecticut senator also asked for details regarding Binance’s dealings with two Hong Kong entities allegedly connected to the transfers.
“Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange,” Blumenthal wrote in the letter.
Investor Takeaway
How Does This Connect to Binance’s Prior Settlement?
The Senate inquiry lands just over two years after Binance pleaded guilty to failing to register as a money transmitting business and breaching U.S. sanctions laws. The company agreed to pay more than $4 billion in penalties and exit the U.S. market under a compliance overhaul.
Founder and former CEO Changpeng Zhao pleaded guilty in November 2023 to anti-money-laundering violations and allowing customers in sanctioned jurisdictions, including Iran, to transact on the platform. He later served four months in prison before being pardoned by President Donald Trump.
Blumenthal described Binance as “a repeat offender,” adding that it “has long been aware that the Iranian regime and its terrorist proxies use its cryptocurrency platform as a convenient and reliable means to bypass international sanctions, anti-money laundering controls, and other banking restrictions.”
What Is Binance’s Response?
Binance has denied the allegations and disputed media reporting about internal dismissals. A spokesperson said the exchange “detected and reported suspicious activity, and this is evidence that our controls are working,” and described prior coverage as incorrect.
“The New York Times’ prior reporting is wrong. Binance has strict KYC (know-your-customer) and compliance procedures in place, and there are no Iranian users on the platform,” the spokesperson said, reiterating the company’s stance against what it called false claims.
Binance has also said it ended its relationship with Blessed Trust, a Hong Kong company identified in reporting as a vendor account allegedly connected to the transfers. According to public statements cited in media reports, the accounts were canceled in January.
The exchange stated in a recent blog post that its “sanctions-related exposure is minimal” and confirmed that an internal investigation is underway, with a report expected to be submitted to the U.S. Justice Department.
Investor Takeaway
Why Does This Matter for the Broader Crypto Market?
The probe adds a political layer to ongoing regulatory oversight of crypto exchanges. Even after formal settlements with federal agencies, congressional investigations can revive scrutiny and extend uncertainty.
Blumenthal also raised concerns about Binance’s reported ties to World Liberty Financial, the cryptocurrency firm owned by the sons of President Trump and his special envoy Steve Witkoff. He alleged that Binance sought to “evade accountability and influence the White House through lobbying and a financial partnership” with the firm.
The inquiry is still in its early stages, and no formal enforcement action has been announced. However, the request for internal compliance records and transaction data suggests that lawmakers are focused not only on alleged transfers but also on how Binance handled internal warnings.
For the industry, the case serves as a reminder that enforcement exposure does not end with a settlement. Congressional oversight, especially in matters tied to sanctions and geopolitics, can reopen compliance debates and test the durability of prior regulatory resolutions.
