US Democrats Probe Binance Amid $1.7 Billion Iranian Sanctions Evasion Allegations

Concerns have been raised that Binance crypto exchange, through some of its partners, appears to have facilitated Iranian sanctions violations and provided support to terrorist groups, allowing over US$1.7 billion (AUD$2.4 billion) to illegally flow to Iran. 

Democratic Senator and Ranking Member of the Senate Permanent Subcommittee on Investigations (PSI), Senator Richard Blumenthal, addressed the matter in an open letter to Binance CEO, Richard Teng.

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.

Democratic Sen. Richard Blumenthal

Blumenthal’s letter followed the publication of reports earlier this week in the Wall Street Journal (WSJ) and New York Times (NYT) that Binance’s internal investigators late last year identified breaches of Iranian sanctions and failures of anti-money laundering measures by Binance partners Hexa Whale and Blessed Trust. 

The reports also claimed that investigators identified over 2,000 Iranian Binance accounts, despite restrictions around providing financial services to Iran and Binance’s own claim that it has banned Iranian users. 

Several of the staff who discovered these breaches were reportedly suspended or fired by Binance.

Documents cited by the NYT and WSJ also indicate that Binance, through Hexa Whale, was helping to finance terrorist groups, including the Houthis in Yemen. Binance’s internal investigatory team also found evidence of cryptocurrency transfers to wallets linked to Iran’s Islamic Revolutionary Guards Corps and payments to crew members of Russia’s sanctions-evading oil tankers.

In his letter, Sen. Blumenthal claimed that Binance ignored advice from its investigatory team to strengthen its know-your-customer (KYC) requirements and rejected “attempts to detect and stop evasion of American and international sanctions.” 

The Senator also dubbed the crypto exchange a “repeat offender,” referring to its previous anti-money laundering breaches, which saw its CEO Changpeng Zhao jailed and the exchange required to pay fines totalling over US$4 billion (AU$5.6 billion).

Sen. Blumenthal wrote that Binance’s seeming unwillingness to heed the advice of its own internal team suggests the exchange is not committed to following US laws or the terms of the agreement it made with the US government following its earlier breaches.

The scale of the newly-revealed illicit transfers — uncaught until nearly two billion dollars flowed to sanctioned entities — and the unexplained firing of internal investigators call into question Binance’s compliance with American sanctions and banking laws, and its 2023 agreement to resolve the previous federal investigation.

Democratic Sen. Richard Blumenthal

Sen. Blumenthal also highlighted the tight relationship between the Trump family’s DeFi project, World Liberty Financial (WLFI) and Binance, writing that following “a deal between WLFI and Emirati Sheikh Tahnoon bin Zayed Al Nahyan, Binance became a ‘vital engine’ and a promotion agent for WLFI,” and adding that Binance now holds “about 85 percent of WLFI’s stablecoins (USD1)…making the Trump family cryptocurrency ventures tightly bound to Binance.”

The Democratic Senator called on Binance to release all its internal records relating to transactions involving Iranian entities and individuals, crew members of the Russian oil tankers, use of USDT and UDS1 to evade sanctions or fund criminal activity, and records relating to the suspension or dismissal of its internal investigation team.

Related: USD1 Briefly Slips Below Peg as World Liberty Alleges Market Manipulation

Binance Refutes Claims, Says Compliance “Best-In-Class”

In a blog post published following the initial reporting from the NYT and WSJ, Binance refuted the claims, saying their compliance program is “best-in-class,” and claiming media reports present a “distorted, jumbled account that relies on false claims by disgruntled former employees.”

Binance argued that in all forms of global finance “bad actors present risk,” but that it had taken significant steps to tighten its compliance systems since being found guilty of sanctions evasions and money laundering in 2023.

Related: Stablecoin Outflows Slow to $2B as Capital Consolidates on Binance

The exchange claimed that it had instituted expanded “sanctions screening and transaction monitoring controls,” and invested hundreds of millions in toughening its compliance systems, which it said has resulted in a 96.8% decrease in its “sanctions-related exposure,” between January 2024 and July 2025.

“With respect to the cases described in recent false reporting, our compliance process was, in fact, effective,” Binance claimed in the blog post.

“We will continue to use our compliance program to protect our users, cooperate with law enforcement, and advance our mission to provide the core infrastructure services for organizing the world’s crypto.”

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