U.S. Senator Launches Congressional Inquiry into Binance Over Alleged Iran and Russia Sanctions Violations
Washington, D.C., Feb. 25 2026 – Senator Richard Blumenthal, the ranking member of the Senate Permanent Subcommittee on Investigations, has opened a formal congressional investigation into cryptocurrency exchange Binance after media reports suggested the platform facilitated roughly $1.7 billion in transactions linked to sanctioned Iranian entities and Russia’s “shadow fleet” of oil tankers.
What prompted the probe?
In a letter addressed to Binance chief executive Richard Teng, the senator cited recent reporting by the Wall Street Journal, The New York Times and Fortune that identified two Binance‑associated partners—Hexa Whale and Blessed Trust—as conduits for moving funds to Iranian government‑affiliated organizations. The same reporting alleged that Binance’s internal investigators traced transfers to digital wallets connected to Iran’s Islamic Revolutionary Guard Corps and payments to crews operating vessels used to evade sanctions on Russian oil exports.
Blumenthal’s request seeks a wide range of documentation, including:
- Internal communications concerning the identified partners and related accounts.
- Records of transactions that involve Iranian or Russian sanction‑evasion participants.
- Compliance policies, audit findings, and any reports submitted to U.S. regulators since the exchange’s 2023 settlement with the Department of Justice.
The senator set a March 6 deadline for Binance to submit the requested material.
Binance’s response
A Binance spokesperson told Cointelegraph that the allegations are “inaccurate” and that the exchange has consistently identified and reported suspicious activity. The company emphasized that it no longer permits Iranian users on its platform and highlighted recent compliance upgrades that, according to the firm, have reduced exposure to high‑risk jurisdictions to “approximately 0.009 % of total volume,” a dramatic drop from prior levels.
CEO Richard Teng also publicly denounced the Wall Street Journal story, labeling it “defamatory” and demanding a retraction. In a separate blog post, Binance claimed to have sharply curtailed dealings with sanctioned entities, citing a 97 % reduction in such exposure since January 2024.
Context: 2023 settlement and ongoing scrutiny
The investigation follows Binance’s 2023 settlement with U.S. authorities, in which the exchange agreed to pay a $4.3 billion civil penalty for alleged anti‑money‑laundering (AML) and sanctions violations. The deal also required Binance to submit to an independent monitor, overhaul its compliance framework, and implement stricter KYC/AML controls. Founder and former CEO Changpeng Zhao stepped down, served a four‑month prison sentence, and the company pledged ongoing cooperation with regulators.
Blumenthal’s inquiry raises the question of whether Binance has fully adhered to the terms of that settlement, especially given the new allegations that suggest possible continued lapses in sanctions screening.
Analysis
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Regulatory pressure mounts – The U.S. Treasury’s Office of Foreign Assets Control (OFAC) and other agencies have intensified enforcement against crypto firms that facilitate sanctioned activities. A congressional investigation adds political weight to ongoing regulatory concerns and could prompt further action, including additional penalties or restrictions on Binance’s U.S. operations.
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Compliance claims under test – Binance’s narrative of a “compliance transformation” will now be measured against tangible evidence of transaction monitoring, internal reporting, and cooperation with law‑enforcement. The outcome could set a benchmark for how crypto exchanges demonstrate compliance in a highly scrutinized environment.
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Potential market impact – While Binance remains the world’s largest crypto exchange by volume, sustained regulatory headwinds could affect user confidence, especially among institutional participants that demand rigorous compliance standards. Any adverse findings may also influence the broader industry’s approach to sanctions screening and AML controls.
- Geopolitical dimensions – The focus on Iran and Russia underscores the intersection of cryptocurrency with broader geopolitical issues. Sanctions evasion through digital assets is a growing concern for policymakers, and this probe may catalyze additional legislative initiatives aimed at tightening oversight of cross‑border crypto flows.
Key takeaways
| Takeaway | Implication |
|---|---|
| Congressional investigation launched – Senator Blumenthal seeks extensive documentation on Binance’s sanctions controls. | Increased political and regulatory scrutiny on Binance’s operations. |
| Alleged $1.7 bn in sanctioned transactions – Reports link Binance to Iranian entities and Russian oil‑shipping networks. | Potential violations of U.S. sanctions that could trigger fines or other enforcement actions. |
| Binance denies wrongdoing – The exchange asserts it has identified and reported suspect activity and dramatically reduced exposure to high‑risk jurisdictions. | The investigation will test the credibility of Binance’s compliance narrative. |
| 2023 settlement backdrop – Binance previously paid $4.3 bn and agreed to stricter monitoring. | The probe may evaluate whether Binance is meeting its settlement obligations. |
| Broader industry impact – Findings could shape future AML/ sanctions policies for crypto platforms. | Might accelerate regulatory harmonization and compliance investments across the sector. |
The inquiry is still in its early stage, and Binance has until early March to provide the requested materials. Both regulators and market participants will watch closely for any revelations that could reshape the compliance landscape for crypto exchanges operating under U.S. jurisdiction.
Source: https://cointelegraph.com/news/us-senator-probes-binance-iran-russia-sanctions?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
