U.S. Senator Launches Investigation into Binance Over Suspected Iranian Money Laundering

▲ Binance

The world’s largest cryptocurrency exchange, Binance, is facing allegations of violating sanctions against Iran and facilitating terrorist financing, prompting the U.S. Senate to launch a formal investigation.

On February 25 (local time), U.S. Senator Richard Blumenthal sent an official inquiry letter to CEO Richard Teng regarding suspicions that Binance allowed transactions amounting to $1.7 billion in violation of sanctions against Iran. The probe follows a report claiming that Binance ignored warnings from its internal investigations team and dismissed key investigators after they uncovered evidence of sanctions breaches. Senator Blumenthal is focusing on whether Binance deliberately undermined U.S. and international sanctions frameworks and enabled the movement of illicit funds.

According to the report, Binance’s internal investigations team identified more than $1 billion in transactions that flowed to Iran-linked entities via Tether (USDT) on the Tron blockchain between March 2024 and August 2025. Investigators concluded that the funds may have served as channels supporting Iranian government institutions and terrorist organizations. However, it was reported that Binance dismissed at least five senior investigators after the findings were submitted. Senator Blumenthal strongly criticized the company, alleging that it ignored internal recommendations to strengthen anti-money laundering controls and refused to take steps to detect and block sanctions evasion attempts.

The controversy is particularly significant because it suggests a direct violation of the compliance commitments Binance made in 2023 when it agreed to pay $4.3 billion in penalties to U.S. authorities. The issue has escalated into a political debate, especially after Binance founder Changpeng Zhao (CZ) was recently pardoned by U.S. President Donald Trump, followed by the apparent dissolution of the internal investigations team and the emergence of new allegations of sanctions violations. Senator Blumenthal has demanded that Binance submit records of transactions involving Iranian individuals and entities, details of fund flows linked to Russian oil tanker crews, and internal documents related to the dismissal of investigators.

Binance has denied the allegations, stating that the investigators were not dismissed for raising compliance concerns but left due to personal circumstances. Nevertheless, several major international outlets have reported evidence that substantial funds moved through Binance partner accounts to Iran-linked networks, intensifying scrutiny. The cryptocurrency industry is closely watching whether the Senate investigation could lead to the revocation of Binance’s operating rights or the imposition of additional massive fines.

The broader cryptocurrency market, including Bitcoin (BTC), is showing signs of volatility amid concerns that the Binance case could trigger a liquidity crisis or further regulatory tightening. Experts note that despite a generally crypto-friendly stance by the current U.S. administration, national security issues such as terrorist financing leave little room for compromise. They say how Binance navigates this crisis could serve as a benchmark for the future survival of global exchanges. Investors are advised to closely monitor Binance’s response and the Senate’s follow-up actions while remaining vigilant to shifts in market risk.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The publisher is not responsible for any investment losses incurred based on this content.