Nine Senate Democrats Press DOJ, Treasury to Probe Binance

Nine Senate Democrats escalated pressure on Binance on Friday, sending a letter to the Treasury Department and Department of Justice demanding a probe into the cryptocurrency exchange's sanctions compliance and illicit finance safeguards. The move follows alarming media reports that potential terrorism funding allegedly passed through the platform.

Senators Demand Investigation Into Binance Controls

The letter, addressed to Treasury Secretary (see the Senate letter) Scott Bessent and Attorney General Pam Bondi, was signed by Senators Elizabeth Warren, Ruben Gallego, Angela Alsobrooks, Mark Warner, and five others. Several signatories have played key roles in shaping the Digital Asset Market Clarity Act, the proposed legislation that would govern the crypto industry.

The senators cited news reports alleging that Binance allowed funds linked to potential terrorism financing to flow through its systems and that the company terminated compliance personnel who uncovered the suspicious activity, according to the Friday letter.

"These allegations raise grave concerns that poor illicit finance controls at Binance remain a significant threat to national security," the senators wrote. They also demanded details about Binance's compliance with its 2023 federal settlement.

Our illicit finance controls are dangerously compromised if enormous sums can flow through Binance to terrorist groups or sanctions evaders.

— From the Senate Democrats' letter

Why Are Senate Democrats Targeting Binance Now?

The letter arrives amid active negotiations over U.S. legislation that would create a regulatory framework for crypto markets. Prevention of illicit finance remains an unresolved provision in the Digital Asset Market Clarity Act, and Senator Mark Warner has taken a leading role among Democrats finalizing language on the topic, according to congressional sources.

Senator Richard Blumenthal, a Connecticut Democrat and senior member of the Senate Homeland Security Committee, separately wrote to Binance earlier this week requesting compliance information. However, because Democrats hold the minority, they lack authority to launch formal committee investigations.

The senators' letter also acknowledged Binance's connections to World Liberty Financial, the crypto venture backed by President Donald Trump and his family behind the USD1 stablecoin. The lawmakers referenced Trump's pardon of Binance founder Changpeng "CZ" Zhao, who had pleaded guilty and served four months in prison for violating anti-money laundering and know-your-customer requirements.

Binance Responds to Allegations

Binance co-CEO Richard Teng has pushed back against the media coverage, calling the reports "inaccurate" and "defamatory," according to prior statements. A company spokesperson did not immediately respond to a request for comment on Friday regarding the senators' demands.

The exchange has been under heightened scrutiny since its 2023 settlement with federal authorities, which imposed strict monitoring obligations. Whether Treasury and DOJ act on the request could carry significant implications for both Binance and the broader debate over crypto regulation.

What This Means Going Forward

The Senate Democrats' push adds political pressure at a delicate moment for crypto legislation. While the minority party lacks subpoena power, the public letter amplifies scrutiny on Binance and forces Treasury and DOJ to respond. The outcome could shape enforcement priorities and influence final provisions of the Digital Asset Market Clarity Act as 2026 negotiations continue.