Senator Richard Blumenthal, a Democrat on the Senate Homeland Security Committee, opened a formal inquiry on Tuesday into $1.7 billion in cryptocurrency transfers from Binance accounts to Iranian entities, demanding the world's largest crypto exchange turn over records about its dealings with two intermediary firms and the dismissal of internal investigators who flagged the transactions.
What Happened: Senate Probe Launched
The inquiry stems from reports in The New York Times, The Wall Street Journal, and Fortune that Binance compliance staff discovered two partners — Hexa Whale and Blessed Trust, both Hong Kong-based entities — had acted as intermediaries funneling funds to accounts tied to Iranian government bodies.
Investigators also found roughly 2,000 accounts associated with Iranian entities on the exchange, despite Binance's stated policy of banning Iranian users.
In a letter to Binance co-chief executive Richard Teng, Blumenthal wrote that the exchange "appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange." He also noted that the internal investigators who raised concerns about the prohibited transactions "were subsequently suspended or fired," which he described as creating "the appearance of retaliation by Binance executives."
The senator asked Binance to provide records by Mar. 6 related to its relationship with Hexa Whale and Blessed Trust, as well as documents concerning "the suspension and dismissal of compliance staff and investigators" involved in the Iran probe. A Binance spokeswoman responded that the company "detected and reported suspicious activity, and this is evidence that our controls are working."
Why It Matters: Sanctions Enforcement Tested
The inquiry carries weight because Binance is a repeat offender on sanctions compliance. In 2023, the exchange pleaded guilty to federal charges for allowing customers in sanctioned countries, including Iran, to transact on its platform, paying $4.3 billion in penalties. Its founder, Changpeng Zhao, served four months in prison.
Under President Donald Trump, Binance's position has shifted considerably — Zhao received a presidential pardon in Oct. 2025, and the Securities and Exchange Commission dropped its lawsuit against the company in May 2025.
Binance also maintains a close business relationship with World Liberty Financial, the crypto firm founded by Trump and his sons, with roughly 85% of WLFI's stablecoins held in Binance accounts.
According to TRM Labs, illicit Bitcoin (BTC) and crypto use surged 147% in 2025, with Tether (USDT) becoming a key money laundering tool for the Islamic Revolutionary Guards Corps and sanctioned Iranian banks.
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