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The world’s largest cryptocurrency exchange, Binance, has once again come under intense scrutiny from regulators and lawmakers after reports emerged that its platform may have facilitated hundreds of millions, and possibly up to $1.7 billion, in crypto transfers linked to Iranian entities, even as global crypto money-laundering activity hit an unprecedented $82 billion last year.
In a formal letter to Binance CEO Richard Teng and as part of an early Senate investigation, Senator Richard Blumenthal requested internal records and clear answers about how the exchange failed to stop sanctioned activity.
Senator Blumenthal launched a probe after Binance staff flagged Iran and Russia-linked trades
New reports and analyses showed serious discrepancies in Binance’s own compliance system, forcing the ranking member of the Senate Permanent Subcommittee on Investigations to take action.
Investigators discovered that two Binance partners, Hexa Whale and Blessed Trust, facilitated trade with Iranian government-linked groups, and that around 2,000 accounts tied to Iran remained active on the leading exchange despite sanctions.
Moreover, the staff traced crypto transfers to wallets linked to Iran’s Revolutionary Guards, and found payments going to crew members on Russia’s shadow oil fleet.
Investigators had warned Binance about Hexa Whale’s illegal activity and urged the exchange to implement stronger identity checks, ban risky accounts, and block wallets tied to Russian oil tankers.
Blumenthal said Binance received the warnings but chose to rebel by granting Hexa Whale VIP status, allowing risky accounts to remain open, and even suspending or firing some compliance investigators who raised these concerns.
Nearly $2 billion had already moved through accounts tied to sanctioned entities by the time Binance took real action, and U.S. lawmakers stepped in, saying the exchange may have broken sanctions once again.
Crypto crime reached $82 billion as Binance failed basic checks
In 2023, Binance promised to tighten its systems and adhere to stricter rules after its former CEO, Changpeng Zhao, pleaded guilty to federal charges and served 4 months in prison. However, Senator Richard Blumenthal says the company is a repeat offender because it’s still allowing sanctioned groups to move money through crypto.
Meanwhile, crypto money laundering reached about $82 billion in 2025, with transfers linked to sanctions evasion and terrorist activity on the rise. According to regulators, the system has big gaps, and large exchanges play a key role in keeping them open.
Lawmakers believe that weak controls on exchanges like Binance make enforcement difficult because reports show that crypto now helps sanctioned Iranian banks move funds and supports weapon makers and groups tied to military operations.
What’s even more concerning is that Binance built close ties with World Liberty Financial, and reports say 85% of World Liberty Financial’s stablecoins now sit on Binance.
The connection between Binance and the crypto venture tied to Donald Trump’s sons is more important than people think. It was during this period that the US Securities Exchange Commission dropped the suit against Binance in 2025, and Trump pardoned Zhao shortly after.
However, Blumenthal says that these actions sent the wrong message to the crypto world. The reason is that it made platforms feel safe to take risks and reduced pressure on them to adhere to the rules.
Binance claims it has changed and says it has enhanced its systems for complying with regulations, added new checks, and now reports suspicious activity sooner. But Blumenthal is not buying it. He points to almost $2 billion in suspicious transfers that occurred before action was taken, and says this shows big problems still persist.
So now, the Senate has given the exchange platform deadlines to turn over documents, and lawmakers are broadening their investigation into how cryptocurrency can be used by sanctioned groups to move funds around. They’re taking it one step at a time, getting into internal reports, account activity, and even employee decisions.
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English (US)