U.S. Senator Richard Blumenthal has launched a Senate investigation into crypto exchange Binance over alleged sanctions violations, according to media reports.
The probe focuses on claims that roughly $1.7 billion was transferred from Binance accounts to organizations linked to Iran, including Yemen’s Houthi militants, as reported by CoinHeadlines earlier.
Blumenthal, a senior Democrat on the Senate Homeland Security Committee, wrote a formal letter to the exchange seeking clarification on compliance controls and monitoring practices.
There are also claims that the internal investigators at Binance had picked up on the suspicious transactions but were later laid off, which has raised concerns among U.S. lawmakers about the monitoring of illicit financial flows in the crypto industry.
Binance pushes back on allegations
Binance has been strongly defending itself against claims of violating sanctions, denying reports that its services were used to transfer funds to Iranian entities.
In a statement, a spokesperson for Binance explained that the earlier reports in the media were not true, adding that the company follows strict know-your-customer (KYC) guidelines.
The crypto exchange also rejected claims made in reports by major outlets regarding the dismissal of internal investigators who allegedly uncovered suspicious transactions.
Additionally, U.S. Senator Richard Blumenthal has requested detailed records from Binance’s co-CEO Richard Teng.
The lawmaker is seeking information about transactions tied to two Hong Kong-based entities flagged by investigators as possible sources of funds routed toward Iran.
One account reportedly belonged to Blessed Trust, a Hong Kong firm that acted as a Binance vendor. According to reports, Binance later terminated the account and ended its relationship with the company in January.
Binance accused of shutting eyes on warnings
Blumenthal has accused the exchange of ignoring internal warnings meant to prevent potential money-laundering schemes involving sanctioned jurisdictions.
His letter also asks Binance to provide documentation related to the suspension or dismissal of compliance personnel who raised concerns.
The probe follows increased regulatory focus on Binance after previous legal issues involving the company’s founder, Changpeng Zhao, who pleaded guilty in 2023 to anti-money laundering charges for failing to comply with sanctions.
As part of a settlement with the authorities, Binance had committed to reducing its activities in the United States and paying $4.3 billion in fines.
Despite the recent attention, the platform has disputed that its exposure to sanctions risk is substantial, and an internal investigation is now under progress, with a thorough report anticipated to be sent to the U.S. Justice Department.