A new investigation closely related to the cryptocurrency market is underway in the US. Connecticut Senator Richard Blumenthal has initiated a formal Senate inquiry into Binance, the world's largest cryptocurrency exchange, over allegations of sanctions violations. The allegations claim that up to $1.7 billion in cryptocurrency transfers were made through the exchange to entities linked to Iran. The investigation centers on funds allegedly transferred to certain Iranian-linked organizations, including the Houthis operating in Yemen. According to a New York Times report, internal audit teams at Binance have linked more than 1,500 accounts to Iranian-related activities. It is alleged that high-volume transactions were conducted through these accounts, particularly between March 2024 and August 2025. The most notable aspect of these transfers is that they were largely made using the USDT stablecoin and via the Tron network, which is frequently preferred for cross-border transactions due to its low transaction fees and fast transfer speeds. However, this technical advantage also brings it under the focus of regulators when it comes to sanctions.
Letter sent to the CEO
In a letter sent to Binance CEO Richard Teng, Blumenthal requested details of the relationships with two Hong Kong-based companies. Allegedly, a Hong Kong company called Blessed Trust opened an account on the platform as one of Binance's suppliers and was the source of Iranian-linked transfers. Binance announced that this account was closed in January and that work with the company was terminated.
The senator also requested documents regarding the dismissal of compliance personnel who detected sanctions violations. News reports indicate that some employees conducting the internal investigation were fired. Binance, however, argues that these personnel changes are related to violations of internal data policies, not sanctions findings.
Binance categorically denies the allegations. Company spokespersons state that there are no Iranian users on the platform and that strict KYC (know your customer) and sanctions control procedures are implemented. CEO Richard Teng described the news as "defamatory." The company also stated that since the beginning of 2024, the total volume of transactions related to high-risk and sanctioned areas has been reduced by 97 percent, and the share of such transactions in the total volume has fallen to 0.009 percent.
This investigation is taking place in the shadow of Binance's past sanctions proceedings with US authorities. In 2023, the company reached a $4.3 billion settlement with US regulators for money laundering and sanctions violations. Founder and CEO Changpeng Zhao resigned and later received a four-month prison sentence. This process reinforced the expectation that crypto exchanges bear similar responsibilities to banks regarding sanctions compliance.
Recent developments show that centralized crypto exchanges are now considered not only technology platforms but also global financial intermediaries. Stablecoin infrastructures and networks offering high liquidity facilitate global capital flows, while national sanctions regimes try to place limits on these flows. At the intersection of these two systems, regulatory pressure is directed directly at the exchanges. The documents requested by Blumenthal and the internal investigation report that Binance has announced it will submit to the Department of Justice will determine the course of events.
Finally, it should be noted that Binance's BNB coin was completely unaffected by this development; on the contrary, it experienced a 5% increase.
