Senator Blumenthal Gives Binance Until March 6 to Explain $1.7 Billion in Iran and Russia Sanctions-Linked Transactions

Blumenthal Sets a Nine-Day Deadline for Binance Compliance Records

Senator Richard Blumenthal, the ranking member of the Senate Permanent Subcommittee on Investigations, has formally launched a probe into Binance over approximately $1.7 billion in transactions allegedly linked to sanctioned entities in Iran and Russia. As of February 25, 2026, Blumenthal has set a March 6 deadline for the exchange to produce communications, account records, and internal compliance reports tied to the allegations.

The probe centers on claims that Binance processed transfers routed to wallets connected to Iran's Islamic Revolutionary Guards Corps (IRGC) and facilitated payments to crews operating tankers in Russia's oil "shadow fleet," a network designed to circumvent Western export sanctions. Binance's own compliance staff reportedly identified two intermediaries, Hexa Whale and Blessed Trust, as entities facilitating trade with Iranian government-linked organizations.

Binance rejected the allegations in a public statement, saying the platform "identified and reported suspicious activity" and maintains strict compliance procedures. The exchange also claimed a 97% drop in exposure to sanctioned jurisdictions since January 2024.

Why a Senate Subcommittee Probe Changes the Calculus

This is not the first time Binance has faced scrutiny over sanctions compliance, but the venue matters. The Senate Permanent Subcommittee on Investigations is the same body that investigated Enron, Goldman Sachs' role in the 2008 financial crisis, and HSBC's money laundering for drug cartels. When this subcommittee requests documents, it carries the implicit threat of subpoena power and public hearings.

The probe is a direct escalation from reporting earlier this month that Binance fired the internal investigators who originally uncovered the $1.7 billion in suspicious flows. That story, based on reporting from Fortune and corroborated by multiple sources, revealed that compliance staff who flagged the Hexa Whale and Blessed Trust transactions were terminated rather than supported. The Senate probe now puts those same transactions under Congressional scrutiny.

Binance's 2023 settlement with the U.S. Department of Justice, which cost the exchange $4.3 billion and led to the resignation of founder Changpeng Zhao, was supposed to close the chapter on sanctions failures. The DOJ installed a compliance monitor as part of that deal. That monitor's report, covering the exchange's post-settlement compliance efforts, is still pending. A Congressional probe running in parallel with an active DOJ monitorship creates overlapping pressure that the exchange cannot manage through a single legal strategy.

The $1.7 Billion Paper Trail

The alleged transaction flows are not abstract. Investigators traced specific transfer patterns from Binance wallets to entities tied to two distinct sanctions-evasion networks.

The first involves Iran's IRGC, designated as a Foreign Terrorist Organization by the United States since 2019. Transfers allegedly moved through Hexa Whale and Blessed Trust, intermediaries that Binance's own compliance team flagged before those team members were reportedly dismissed. Fortune's earlier reporting placed approximately $1 billion of the total as Iran-linked, with the remainder tied to Russia.

The second network involves payments to operators of Russia's shadow fleet, the constellation of aging tankers that carries Russian crude oil above the G7 price cap of $60 per barrel. These vessels frequently change flags, ownership structures, and insurance providers to evade detection. Payments to their crews and operators, if routed through a U.S.-connected exchange, would constitute sanctions violations under multiple executive orders.

Blumenthal's document request specifically asks for internal communications about these accounts, suggesting the subcommittee believes Binance may have had contemporaneous knowledge of the suspicious activity beyond what it has publicly disclosed.

What This Means for Binance Users

For the exchange's roughly 200 million registered users, the immediate impact is reputational rather than operational. Binance has not been ordered to freeze accounts, halt withdrawals, or restrict services in any new jurisdiction as a result of this probe. The March 6 deadline is for document production, not enforcement.

But the longer arc matters more. If the subcommittee's investigation produces evidence that Binance knowingly processed sanctions-linked transactions after its $4.3 billion settlement, the consequences could include:

Additional DOJ action. The 2023 plea agreement includes provisions for enhanced penalties if the exchange violates its terms during the monitorship period.
OFAC designations. The Treasury Department's Office of Foreign Assets Control could add specific Binance wallets or services to the Specially Designated Nationals list, which would make it illegal for U.S. persons to interact with them.
License revocations. Binance holds or has applied for licenses in multiple jurisdictions. Regulatory bodies in the EU, particularly under MiCA, and in the UK could use a U.S. Senate finding as grounds to revisit approvals.

Binance card holders in jurisdictions where the exchange already faces geo-bans or restrictions should monitor this closely. Regulatory escalation tends to cascade: a finding in one jurisdiction often triggers reviews in others.

The Broader Pattern of Exchange Accountability

Binance is not alone in facing post-settlement scrutiny. The crypto industry's largest exchanges are all navigating a regulatory environment where past settlements do not guarantee future immunity.

KuCoin EU lost the ability to onboard new customers in Austria after AML officers disappeared three months into its MiCA license. Coinbase, despite being publicly traded and operating under a U.S. regulatory framework, custodies 80% of U.S. crypto ETF assets, a concentration that regulators have flagged as a systemic risk.

For users who hold funds on centralized exchanges, the lesson from Binance's ongoing legal exposure is straightforward: custodial platforms carry counterparty risk that goes beyond market volatility. An enforcement action can freeze withdrawals, restrict card functionality, or force service exits from entire regions with little warning. Self-custody card options eliminate the exchange-level counterparty risk, though they introduce other trade-offs like gas fees and smart contract risk.

The Elliptic report from earlier this month identified five exchanges already filling the void left by Garantex, Russia's sanctioned exchange. The demand for sanctions-evasion infrastructure does not disappear when one platform is penalized. It migrates. That migration pattern is exactly what Blumenthal's probe is designed to map.

FAQ

What did Senator Blumenthal specifically request from Binance? Communications, account records, and internal compliance reports related to Iranian users and Russian sanctions-evasion networks. The deadline for production is March 6, 2026.

Is this related to Binance's 2023 DOJ settlement? Yes. The $4.3 billion settlement included a compliance monitor and terms that could trigger enhanced penalties if Binance is found to have continued processing sanctions-linked transactions during the monitorship period.

Will this affect Binance card users? Not immediately. The probe is a document request, not an enforcement action. However, if findings lead to additional regulatory action, card services in affected jurisdictions could face restrictions.

What are Hexa Whale and Blessed Trust? Intermediary entities that Binance's own compliance staff identified as facilitating transactions with Iranian government-linked organizations. The compliance staff who flagged them were reportedly terminated.

Has Binance responded to the probe? Binance stated it "identified and reported suspicious activity" and enforces strict compliance procedures. The exchange claims a 97% reduction in exposure to sanctioned jurisdictions since January 2024.

Overview

Senator Richard Blumenthal has launched a formal Senate probe into Binance over $1.7 billion in transactions allegedly linked to Iran's IRGC and Russia's sanctions-evading oil tanker fleet. The exchange has until March 6 to produce internal communications, account records, and compliance reports. This investigation escalates from earlier reporting that Binance fired the investigators who uncovered the suspicious flows, and runs in parallel with an active DOJ compliance monitor installed after the exchange's $4.3 billion settlement in 2023. Binance denies wrongdoing and claims a 97% drop in sanctioned jurisdiction exposure. For users, the immediate risk is reputational, but the downstream consequences of a Congressional finding could include enhanced DOJ penalties, OFAC designations, and license revocations across multiple jurisdictions.