Blumenthal Opens Inquiry After New Reporting Reveals Binance Allowed $1.7 Billion in Money Laundering to Iran Proxies & Russia's Shadow Fleet

[WASHINGTON, DC] - U.S. Senator Richard Blumenthal (D-CT), Ranking Member of the Senate Permanent Subcommittee on Investigations (PSI), today wrote to Richard Teng, chief executive officer of Binance, raising concerns about recent reporting that the company appears to have helped prop up Iranian-linked terrorist organizations and illicit Russian oil sales. As part of a preliminary inquiry into the illicit use of cryptocurrencies by sanction entities, Blumenthal is seeking information and records from Binance, including details on why the exchange chose to suspend, and in some cases, terminate compliance personnel who discovered illicit Iranian and Russian use of the platform.

"According to stunning reports from the Wall Street Journal, the New York Times, and Fortune, late last year, Binance compliance staff found that two Binance partners, Hexa Whale and Blessed Trust, acted as intermediaries for laundering money and enabling trade with Iranian government entities," Blumenthal wrote in a letter to Teng. "According to documents obtained by the Times and the Journal, Binance was even warned that Hexa Whale was financing terrorist organizations such as the Yemeni Houthis, and internal investigators found cryptocurrency transfers to wallets associated with Iran's Islamic Revolutionary Guards Corps and payments to crew members of Russia's sanctions-evading shadow fleet of oil tankers."

Blumenthal pointed to Binance's efforts to dodge accountability after its repeated failure to prevent use of its cryptocurrency platform by sanctioned entities, terrorist organizations, and other criminal actors, "Instead of actually preventing illicit use, Binance has sought to evade accountability and influence the White House through lobbying and a financial partnership with World Liberty Financial (WLFI), the cryptocurrency firm owned by the sons of President Trump and his special envoy Steve Witkoff… This influence campaign has worked: in May 2025, the Securities and Exchange Commission announced that it was dismissing a lawsuit against Binance for lying to regulators and mishandling funds, followed in October by the stunning Presidential pardon of founder Changpeng Zhao."

"The scale of the newly-revealed illicit transfers - uncaught until nearly two billion dollars flowed to sanctioned entities - and the unexplained firing of internal investigators call into question Binance's compliance with American sanctions and banking laws, and its 2023 agreement to resolve the previous federal investigation," Blumenthal concluded.

The full text of Blumenthal's letter to Teng is available here and below.

Dear Mr. Teng:

I write regarding reports that Binance has facilitated the large-scale violation of American and international sanctions against the government of Iran. Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange, allowing $1.7 billion in transfers to Iran.^[1] These transactions have helped prop up Iranian-linked terrorist organizations and illicit Russian oil sales. I therefore demand that you provide the Permanent Subcommittee on Investigations ("PSI" or "the Subcommittee") records and information related to Binance's role in Iranian money laundering and its repeated failure to prevent illicit use by sanctioned entities, terrorist organizations, and other criminal actors.

According to stunning reports from the Wall Street Journal, the New York Times, and Fortune, late last year, Binance compliance staff found that two Binance partners, Hexa Whale and Blessed Trust, acted as intermediaries for laundering money and enabling trade with Iranian government entities.^[2] Additionally, Binance compliance found 2,000 accounts associated with Iranian entities on its cryptocurrency exchange,^[3] despite restrictions on Iranian banking and Binance's claim that it bans Iranian users.^[4] According to documents obtained by the Times and the Journal, Binance was even warned that Hexa Whale was financing terrorist organizations such as the Yemeni Houthis, and internal investigators found cryptocurrency transfers to wallets associated with Iran's Islamic Revolutionary Guards Corps and payments to crew members of Russia's sanctions-evading shadow fleet of oil tankers.^[5]

Binance appears to have ignored clear warning signs, knowingly allowed illicit accounts to operate, and even provided hands-on support to entities engaged in money laundering. While investigators recommended improvements to 'know your customer' practices and to ban sailors on the Russian shadow fleet, you reportedly rejected those attempts to detect and stop evasion of American and international sanctions.^[6] Binance reportedly even provided Hexa Whale with VIP status despite knowing that it was suspected of using false documents and that its staff were directly involved in Blessed Trust's illicit trading on the platform.^[7] Alarmingly, the investigators that raised concerns about these prohibited Iran-linked transactions were subsequently suspended or fired,^[8] creating the appearance of retaliation by Binance executives.

Binance is a repeat offender: it has long been aware that the Iranian regime and its terrorist proxies use its cryptocurrency platform as a convenient and reliable means to bypass international sanctions, anti-money laundering controls, and other banking restrictions. In November, 2023, the U.S. Departments of Justice and Treasury announced that Binance and its founder, Changpeng Zhao ("CZ"), had pleaded guilty to federal charges that the exchange had willfully transferred nearly a billion dollars to Iranian entities, as well as to terrorist organizations, narcotics cartels, and cybercrime groups.^[9] As a part of that plea agreement, Binance committed to retaining a compliance monitor to improve its compliance programs, and CZ was sentenced to four months in prison.^[10]

Instead of actually preventing illicit use, Binance has sought to evade accountability and influence the White House through lobbying and a financial partnership with World Liberty Financial (WLFI), the cryptocurrency firm owned by the sons of President Trump and his special envoy Steve Witkoff.^[11] After an initial partnership in a deal between WLFI and Emirati Sheikh Tahnoon bin Zayed Al Nahyan,^[12] Binance became a "vital engine" and a promotion agent for WLFI. [13] Currently about 85 percent of WLFI's stablecoins (USD1) are held in Binance accounts, making the Trump family cryptocurrency ventures tightly bound to Binance.^[14] This influence campaign has worked: in May 2025, the Securities and Exchange Commission announced that it was dismissing a lawsuit against Binance for lying to regulators and mishandling funds,^[15] followed in October by the stunning Presidential pardon of founder Changpeng Zhao.^[16]

Binance and other cryptocurrency exchanges have fostered and fueled a chilling escalation in terrorist money laundering that causes grave harm to American national security. According to TRM Labs, after years of decline, illicit cryptocurrency use skyrocketed in 2025 with a 147 percent increase in transfers to wallets associated with sanction evasion, criminal activities, and terrorist organizations.^[17] Tether, the cryptocurrency used in the Binance-facilitated scheme, has become a key money laundering tool for the Islamic Revolutionary Guards Corps,^[18] sanctioned Iranian banks,^[19] and Iranian weapons manufacturers.^[20] Binance and other cryptocurrency ventures' failures to prevent money laundering and terrorist financing - backed by pardons and leniency from the White House - have newly enabled and emboldened foreign adversaries and crime.

The scale of the newly-revealed illicit transfers - uncaught until nearly two billion dollars flowed to sanctioned entities - and the unexplained firing of internal investigators call into question Binance's compliance with American sanctions and banking laws, and its 2023 agreement to resolve the previous federal investigation. The Permanent Subcommittee on Investigations is conducting a preliminary inquiry into the illicit use of cryptocurrencies, including by Iranian and Russian entities, to bypass U.S. sanctions. Pursuant to Senate Resolution 94 (119th Cong.) and PSI Rule 1, please provide information and records responsive to the following requests by March 6, 2026.

1. Please produce all records related to the use of Binance by the Iran-connected entities Hexa Whale and Blessed Trust, including the internal report authored by compliance investigators, decisions to provide VIP status or assistance to such accounts, registration information, and any communications related to the entities and investigations.
2. Please produce all records related to the use of Binance by individuals in Iran or that have engaged in transactions with Iranian entities, whether directly or indirectly, including any internal investigations, recommendations for policy changes, warnings provided about transfers, and communications regarding such users.
3. Please produce all records related to the use of Binance by individuals involved in the Russian shadow fleet and other illicit oil sales, whether directly or indirectly, including any internal investigations, recommendations for policy changes, warnings provided about transfers, and communications regarding such users.
4. Please produce all records related to the use of Tether and USD1 by Binance users in connection to sanction evasion, criminal activities, money laundering, and the provision of support to terrorist organizations.
5. Please produce all records related to the suspension and dismissal of compliance staff and investigators involved in investigations into illicit Iranian and Russian use of Binance services.

Please contact the Subcommittee should you have any questions about responding to these requests. Thank you for your attention to this matter.

Sincerely,

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