U.S. Senator Richard Blumenthal, a prominent Democrat on the Senate Homeland Security Committee, has launched a formal probe into Binance following allegations that the cryptocurrency exchange facilitated massive sanctions violations. The investigation centers on reports that approximately $1.7 billion was transferred through the platform to Iran-linked organizations, including Houthi militants in Yemen. Senator Blumenthal has requested detailed records from Binance co-CEO Richard Teng regarding the exchange’s dealings with two Hong Kong-based entities, including a vendor known as Blessed Trust, which was allegedly linked to the illicit flow of funds.
The inquiry was prompted by reports from the New York Times and other major outlets suggesting that internal investigators who flagged these suspicious activities were subsequently dismissed by the company. In a letter to the exchange, Blumenthal expressed concern that Binance may have ignored critical warnings and recommendations intended to prevent money laundering schemes. He has specifically demanded that the company turn over records related to the suspension and termination of the compliance staff and investigators involved in identifying the alleged breaches.
Binance has forcefully denied the accusations, calling the reports inaccurate and asserting that it maintains strict “know-your-customer” and compliance procedures. A spokesperson for the exchange stated that there are no Iranian users on the platform and reiterated that the company stands against what it describes as false claims regarding the dismissal of its staff. While Binance confirmed it ceased working with Blessed Trust in January, it maintains that its current exposure to sanctions-related risks is minimal.
This latest federal scrutiny follows a landmark 2023 settlement in which Binance agreed to pay $4.3 billion in penalties after its founder, Changpeng Zhao, pleaded guilty to violating anti-money-laundering laws. Although Zhao served a four-month prison sentence before being pardoned by President Donald Trump, the company remains under intense regulatory pressure. Binance official Rachel Conlan noted that an internal investigation is currently underway and a comprehensive report is expected to be submitted to the U.S. Justice Department by February 25.
