Senator Probes Binance Over $1.7B Iran Deals

A U.S. senator has launched a probe into Binance over allegations that $1.7 billion in crypto flowed from the exchange to Iran-linked entities, escalating regulatory pressure on the world's largest cryptocurrency platform. Senator Richard Blumenthal, a senior Democrat on the Senate Homeland Security Committee, sent a letter on Tuesday to Binance co-chief executive Richard Teng demanding detailed transaction records, according to reporting by the New York Times.

Why Is a US Senator Probing Binance Over Iran Sanctions?

Blumenthal's probe centers on allegations that $1.7 billion was transferred from Binance accounts to organizations with ties to Iran, including Yemen's Houthi militants. Internal compliance investigators at Binance reportedly identified the suspicious transfers but were fired after raising concerns, according to reports from the New York Times, Wall Street Journal, and Fortune.

The Connecticut senator's letter specifically requested records related to two Hong Kong-based entities flagged by those investigators as the source of the Iran-bound funds. One account belonged to Blessed Trust, a Hong Kong firm that operated as a Binance vendor. A Binance representative told the Times that the exchange had canceled those accounts and severed ties with Blessed Trust in January.

"Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange," Blumenthal wrote. He also demanded that Teng turn over documentation regarding the suspension and dismissal of the compliance personnel who originally flagged the violations.

Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange.

Binance Pushes Back on Sanctions Claims

Binance firmly rejected the allegations in an email statement. A spokesperson declared that prior New York Times reporting was inaccurate, insisting the exchange enforces strict know-your-customer and compliance protocols. "There are no Iranian users on the platform," the spokesperson stated, while also pushing back against what the company characterized as false claims in articles by the Times, Wall Street Journal, and Fortune.

The exchange published a blog post on Sunday asserting that its "sanctions-related exposure is minimal." Spokesperson Rachel Conlan separately confirmed to the Times that an internal investigation is underway and that a comprehensive report would be submitted to the U.S. Justice Department on February 25.

Binance's Sanctions History Looms Large

The new probe arrives against the backdrop of Binance's troubled regulatory past. Founder and former CEO Changpeng Zhao pleaded guilty in November 2023 to violating anti-money-laundering laws and enabling users in sanctioned nations, including Iran, to trade on the platform. As part of the settlement, Binance agreed to pay $4.3 billion in penalties and fully withdraw from the U.S. market.

Zhao served four months in federal prison before receiving a presidential pardon from Donald Trump. The latest allegations suggest that despite those penalties and leadership changes, concerns about Binance's sanctions compliance have not been resolved. Blumenthal's investigation could reignite congressional scrutiny of the broader crypto industry's ability to prevent illicit financial flows across borders.