On February 24, 2026, Senator Richard Blumenthal, the lead Democrat on the Senate Permanent Subcommittee on Investigations, initiated a formal inquiry into Binance following reports of massive sanctions violations. The investigation centers on allegations that the world’s largest cryptocurrency exchange processed approximately 1.7 billion dollars in transactions linked to sanctioned Iranian entities and Russia’s “shadow fleet” of oil tankers. In a letter sent to Binance CEO Richard Teng, Blumenthal demanded extensive internal records, citing concerns that the platform may have facilitated money laundering for groups including Yemen’s Houthi militants and Iran’s Islamic Revolutionary Guard Corps (IRGC). This move signals renewed political scrutiny of Binance’s compliance controls, coming just months after the company entered a record 4.3-billion-dollar settlement with U.S. authorities. The inquiry specifically requests documentation regarding the exchange’s relationship with two Hong Kong-based partners, Hexa Whale and Blessed Trust, which are alleged to have acted as conduits for these illicit financial flows.

Investigating Internal Whistleblower Claims and Compliance Retaliation

A primary focus of the Senate probe is the reported treatment of Binance’s own internal investigators who flagged suspicious activity late last year. Media revelations from the New York Times and the Wall Street Journal suggest that at least four employees were disciplined, suspended, or fired after identifying over 1,500 accounts accessed from Iran. Senator Blumenthal has characterized this as a “troubling pattern” where the company may have prioritized business growth over its legal and regulatory obligations. The inquiry demands that Binance provide all communications and records related to these terminations, as well as an explanation for why these warnings were reportedly ignored by senior leadership. While Binance has publicly denied any retaliation against its compliance staff, the Senate Subcommittee is seeking to determine if the exchange has violated the terms of its 2023 plea agreement, which required the implementation of robust anti-money laundering and anti-terrorist financing safeguards.

Navigating the Political Tensions of Presidential Pardons and Crypto Ventures

The investigation into Binance is unfolding against a backdrop of intense political debate in Washington regarding the recent presidential pardon of the exchange’s founder, Changpeng Zhao. Some Democratic lawmakers have suggested that the pardon was linked to Binance’s business dealings with the Trump family’s crypto venture, World Liberty Financial—a claim that both the company and Zhao have staunchly denied. The Senate inquiry aims to look past the political rhetoric to examine the “hard data” of the exchange’s current on-chain activity, setting a March 6 deadline for the delivery of the requested documents. Binance maintains that it has undergone a “strong compliance transformation” and has significantly reduced its exposure to sanctioned jurisdictions, claiming a 97 percent drop in high-risk volume since early 2024. However, as the Subcommittee begins its review of internal compliance records, the outcome of this probe will likely have profound implications for the exchange’s ability to maintain its newly acquired national bank charters and its standing within the regulated American financial system.