Senator Richard Blumenthal has opened a formal Senate probe into Binance after media reports that roughly $1.7 billion moved from accounts on the exchange to Iran-linked organizations — including transfers tied to Yemen’s Houthi militants.
Blumenthal, the top Democrat on the Senate Homeland Security Committee, sent a letter to Binance co-CEO Richard Teng asking for documents and records related to the alleged transfers and the company’s handling of internal warnings. The senator specifically requested information about two Hong Kong entities identified by Binance investigators as origin points for the transfers. One of those accounts was reportedly registered to Blessed Trust, a Hong Kong firm that served as a Binance vendor; the newspaper said Binance stopped working with Blessed Trust and canceled the accounts in January.
According to multiple news outlets, internal Binance investigators flagged the suspicious activity and were later dismissed. Blumenthal wrote that the actions suggest Binance “appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes” and requested records on the suspension and dismissal of the compliance staff involved.
Binance has rejected the reporting. In an email to CoinDesk, a spokesperson said the New York Times’ prior reporting was “wrong,” insisted the exchange maintains strict KYC and compliance procedures, and claimed “there are no Iranian users on the platform.” Binance has called coverage in the New York Times, Wall Street Journal and Fortune “false claims” and reiterated that an internal probe is underway.
The probe arrives against the backdrop of Binance’s prior legal troubles: founder and former CEO Changpeng Zhao pleaded guilty in November 2023 to violations of U.S. anti-money-laundering laws and admitting that customers in sanctioned countries, including Iran, had used the platform. Binance agreed to pay $4.3 billion in penalties and to exit the U.S. market; Zhao served four months in prison before being pardoned by President Donald Trump.
Binance has sought to downplay its exposure to sanctions risk, saying in a recent blog post that its “sanctions-related exposure is minimal.” A spokesperson told the New York Times a full internal report would be submitted to the U.S. Justice Department on Feb. 25.
What’s next: Blumenthal’s letter signals intensified congressional scrutiny of the exchange’s compliance practices. Binance must now respond to the senator’s records request, and regulators and investigators will likely weigh the contents of the company’s internal report once it’s turned over to the DOJ.
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