Binance Hits Back at Senate Over $2 Billion Iran Laundering Claims

Binance has formally pushed back against a US Senate inquiry accusing the exchange of facilitating Iranian money laundering and sanctions evasion. Co-CEO Richard Teng called the underlying allegations “false and defamatory.”

The response follows a formal inquiry from Senator Richard Blumenthal, who demanded records related to nearly $2 billion in transfers to sanctioned entities. The letter requested answers over the firing of investigators who had flagged the activity.

Binance Cites 97% Drop in Illicit Exposure

Teng took to social media to directly address Blumenthal’s February 24 letter, rejecting its premise that Binance knowingly enabled Iranian sanctions evasion. The exchange published a detailed blog post defending its compliance infrastructure alongside the response.

In it, Binance cited a 97% drop in exposure to allegedly illicit wallets between early 2024 and mid-2025. Over the past three years, it claimed to help law enforcement seize more than $752 million in illicit funds.

Binance also confirmed it had offboarded both Hexa Whale and Blessed Trust, two exchange partners alleged to have acted as intermediaries for Iranian money laundering, following its own proactive internal investigations.

The exchange also pushed back against allegations that it had retaliated against staff who flagged compliance concerns. The exchange said those employees were dismissed for breaching internal confidentiality policies, not for raising compliance issues.

Binance has separately threatened the Wall Street Journal with legal action over the original report, accusing the publication of defamation and demanding a retraction.

Senator Claims Binance Enabled Iranian Sanctions Evasion

Beyond facilitating what Blumenthal described as large-scale violations of American and international sanctions, the senator alleged Binance had actively enabled the activity.

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,” Blumenthal wrote. 

He also noted that Binance’s own compliance staff had flagged over 2,000 Iranian-linked accounts, despite the exchange’s ban on such users.

The senator framed the allegations as part of a longer pattern of misconduct stretching back years. 

In 2023, Binance pleaded guilty to federal charges for willfully transferring nearly a billion dollars to Iranian entities and terrorist organizations. Founder Changpeng Zhao was sentenced to four months in prison.

Rather than addressing its underlying compliance problems, Blumenthal argued, Binance had sought political cover through a partnership with World Liberty Financial. The crypto venture is tied to US President Donald Trump’s family, with around 85% of its stablecoins currently held in Binance accounts. 

The SEC dropped its lawsuit against Binance last May, and Zhao received a presidential pardon just months later.

Congressional Scrutiny Lands at a Sensitive Moment

Friday marked the subcommittee’s deadline for Binance to hand over the requested records. Though the exchange responded publicly via a blog post, it stopped short of providing what Blumenthal had asked for.

The confrontation also arrives at a sensitive moment for the broader industry. 

According to a recent Chainalysis report, illicit addresses received at least $154 billion in 2025. The figure reflected a 162% surge from the prior year. The increase was driven largely by a 694% spike in funds flowing to sanctioned entities. 

Chainalysis described the shift as a new era of large-scale nation-state activity linked to crypto crime. Meanwhile, stablecoins accounted for 84% of all illicit transaction volume, up from just 15% in 2020. 

The asset class sits at the center of the Binance allegations, with Tether identified as a key laundering vehicle.

For exchanges like Binance, the data considerably sharpens the stakes of the Senate inquiry. Whether its compliance record holds up under congressional scrutiny could shape how lawmakers approach crypto regulation going forward.