Key Takeaways
- Senator Richard Blumenthal launched a formal inquiry into Binance over $1.7 billion in alleged Iran-linked and Russia shadow-fleet transactions.
- Binance denies violating sanctions laws and says it has reduced sanctions exposure by more than 96% since 2024.
- The probe renews scrutiny just years after Binance’s $4.3 billion U.S. settlement and Changpeng Zhao’s prison sentence.
Just two years after agreeing to one of the largest corporate settlements in U.S. history, Binance is back under the microscope.
On February 24, U.S. Senator Richard Blumenthal, ranking member of the Senate Permanent Subcommittee on Investigations, launched a formal inquiry into the world’s largest crypto exchange.
The probe centers on allegations that Binance facilitated nearly $1.7 billion in transactions tied to Iranian entities and Russia’s sanctions-evasion “shadow fleet.”
The letter signals renewed political and regulatory pressure on a company that had spent much of the past year emphasizing reforms and compliance upgrades.
A Formal Senate Inquiry
In a letter addressed to Binance co-CEO Richard Teng, Blumenthal requested extensive documentation related to Iranian user activity, transactions involving Russia’s shadow fleet, and the potential use of stablecoins such as Tether (USDT) and USD1 to evade sanctions.
The senator also sought information about the suspension or dismissal of compliance personnel and demanded responses by March 6.
“Binance appears to have ignored clear warning signs, knowingly allowed illicit accounts to operate, and even provided hands-on support to entities engaged in money laundering,” Blumenthal wrote.
He added that the reported transfers “call into question Binance’s compliance with American sanctions and banking laws, and its 2023 agreement to resolve the previous federal investigation.”
The inquiry follows investigative reporting by Fortune and CCN on Feb. 13 and subsequent reporting by The New York Times on Feb. 23.
Fortune alleged that internal Binance investigators uncovered evidence of more than $1 billion in USDT transactions routed through the Tron blockchain to Iran-linked entities between March 2024 and August 2025.
The New York Times reported that approximately $1.7 billion flowed from two Binance accounts to Iranian groups associated with designated terrorist organizations.
One account allegedly belonged to a Binance vendor. Individuals in Iran accessed more than 1,500 Binance accounts despite platform restrictions.
The Entities at the Center
According to reporting cited by multiple outlets, Binance’s internal investigators identified two Hong Kong-based entities — Hexa Whale and Blessed Trust — as intermediaries facilitating transactions involving Iranian users.
Documents reviewed by various publications suggested Binance had been warned about Hexa Whale’s links to entities including the Yemeni Houthis.
Investigators reportedly identified transactions connected to wallets associated with Iran’s Islamic Revolutionary Guard Corps (IRGC), as well as payments involving crew members tied to Russia’s shadow fleet of oil tankers.
Compliance staff allegedly recommended enhanced know-your-customer (KYC) controls and restrictions on certain high-risk accounts. Reports claim those recommendations were not adopted and that Hexa Whale received VIP status despite concerns about documentation.
Some reports further state that several compliance investigators were suspended or terminated in late 2025, with departures attributed internally to “violations of company protocol.”
Binance disputes those claims.
Binance Pushes Back
In response to the allegations, Binance said it conducted an internal review and found “no evidence of violations of applicable sanctions laws.”
The company also denied dismissing investigators for raising concerns about sanctions-related activity.
Binance emphasized that it has strengthened its compliance infrastructure significantly since its 2023 settlement with U.S. authorities.
According to the company, sanctions exposure — measured as a percentage of total trading activity — fell from 0.284% in January 2024 to 0.009% by July 2025, a 96.8% decrease.
Binance also reported that transaction volume involving four major Iranian crypto exchanges declined from $4.19 million in January 2024 to $1.1 million in January 2026.
The exchange said it now dedicates roughly one quarter of its workforce to anti-money laundering (AML) and sanctions screening.
Binance’s Complicated Recent History
The renewed scrutiny comes after Binance’s landmark November 2023 settlement with the U.S. Department of Justice (DOJ).
At the time, Binance admitted to violations of the Bank Secrecy Act, failure to register as a money services business, and sanctions breaches.
The company agreed to pay $4.3 billion in penalties — then the largest corporate fine in DOJ history.
Founder Changpeng Zhao (CZ) pleaded guilty to failing to maintain an effective AML program and was sentenced to four months in prison in April 2024.
He completed his sentence and was released in September 2024. In 2025, he received a presidential pardon.
Since then, Binance leadership has sought to present the company as reformed and compliance-focused.
The Senate inquiry raises fresh questions about whether those reforms are sufficient — and whether the company has truly resolved its past issues.
What Comes Next for Binance?
For now, the investigation remains at the inquiry stage. Investigators have not announced any formal charges related to the new allegations.
Still, the probe underscores the fragile balance Binance continues to navigate: operating as the world’s largest crypto exchange while under persistent regulatory scrutiny in the United States.
As lawmakers request documents and investigators review records, the outcome could shape not only Binance’s future — but broader expectations for how global crypto exchanges manage sanctions compliance in an increasingly complex geopolitical environment.
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Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
