The probe centers on claims that the platform processed roughly $1.7 billion in transactions tied to sanctioned Iranian entities and Russia’s so-called “shadow fleet” of oil tankers.

The inquiry, led by Blumenthal in his role on the Senate Permanent Subcommittee on Investigations, follows recent reports by major U.S. media outlets alleging that Binance failed to prevent high-risk transactions linked to geopolitically sensitive actors.

Allegations of Sanctions Evasion

According to investigative reporting cited in the Senate inquiry, two Binance partner firms – Hexa Whale and Blessed Trust – allegedly acted as intermediaries facilitating trade involving Iranian government-linked organizations. Lawmakers are examining whether those entities enabled financial flows connected to restricted groups.

The reports further claim that certain funds were traced to digital wallets associated with Iran’s Islamic Revolutionary Guard Corps and regional proxies, including Houthi militants in Yemen. If confirmed, such activity could constitute serious violations of U.S. sanctions law.

In addition, Binance is accused of processing payments tied to crews operating tankers in Russia’s “shadow fleet” – vessels reportedly used to circumvent international restrictions on Russian oil exports. The Senate probe is seeking to determine whether the exchange knowingly or negligently facilitated those transactions.

Another sensitive element involves internal compliance concerns. According to reporting referenced in the inquiry, investigators within Binance who flagged more than 1,500 active Iranian-linked accounts were later suspended or dismissed. Lawmakers are now requesting documentation related to those internal actions.

Binance Pushes Back

Binance has firmly rejected the accusations, describing the media coverage as misleading and inaccurate. A company spokesperson said the exchange has undergone what it calls a “compliance transformation” since its 2023 settlement with U.S. authorities.

The firm claims its exposure to sanctioned jurisdictions has fallen sharply since early 2024 and insists it does not permit Iranian users on the platform. Binance also says it has removed all accounts identified as suspicious under its internal monitoring systems.

CEO Richard Teng has demanded corrections from several news outlets, arguing that the reporting distorts the company’s compliance progress.

Political and Regulatory Fallout

The renewed scrutiny comes just over two years after Binance reached a $4.3 billion settlement with U.S. authorities and pleaded guilty to Anti-Money Laundering and sanctions violations. That agreement marked one of the largest enforcement actions in crypto history.

Former CEO Changpeng Zhao, who stepped down as part of the settlement and served a four-month prison sentence, was later pardoned by President Donald Trump in October 2025 – a move that drew political attention at the time.

Blumenthal’s inquiry also raises questions about Binance’s recent partnership with World Liberty Financial, a crypto venture linked to the Trump family. The senator is seeking clarity on whether any political connections influenced regulatory decisions, including the handling of prior SEC actions.

The subcommittee has set a March 6, 2026 deadline for Binance to submit internal communications, account records, and compliance documentation related to the allegations. Depending on what lawmakers uncover, the case could reopen broader debates over crypto oversight, sanctions enforcement, and the global reach of digital asset platforms.

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Filed under: Bitcoin - @ February 25, 2026 2:20 pm