A group of 11 Democratic U.S. senators has formally called on the Treasury Department and the Justice Department to open a comprehensive investigation into Binance over alleged sanctions and anti-money laundering compliance failures.

In a February 27, 2026 letter, the lawmakers urged federal authorities to examine whether Binance has violated the terms of its 2023 federal settlement agreement, citing recent media reports alleging significant illicit finance risks tied to the exchange.

The senators described the alleged lapses as a “significant threat to national security.”

Alleged Illicit Flows

According to the letter, approximately $1.7 billion in digital assets—largely involving Tether’s USDT stablecoin on the Tron blockchain—allegedly flowed through Binance to Iranian entities, including organizations linked to the Islamic Revolutionary Guard Corps (IRGC) and Yemen’s Houthi groups.

The senators referenced reports suggesting that Binance’s internal investigators had identified intermediaries, including Hong Kong-based firms Hexa Whale and Blessed Trust, that facilitated transfers tied to sanctioned actors.

The letter also raised concerns that more than 1,500 accounts were accessed by users in Iran despite Binance’s stated policy prohibiting Iranian customers.

Additional allegations include possible facilitation of transactions linked to Russian oil sales through so-called “shadow fleet” tankers and claims that compliance staff who flagged suspicious activity were dismissed. The senators also cited reports of reduced cooperation with law enforcement data requests and the launch of new products that could heighten sanctions-evasion risks.

Congressional Pressure Mounts

The letter was led by Sen. Chris Van Hollen (D-Md.) and signed by 10 other Democratic senators, including Elizabeth Warren (D-Mass.), Mark Warner (D-Va.), and Raphael Warnock (D-Ga.).

Separately, Sen. Richard Blumenthal (D-Conn.), ranking member of the Senate Permanent Subcommittee on Investigations, opened a parallel inquiry on February 24 by sending a letter directly to Binance Chief Executive Richard Teng. Blumenthal requested internal records related to the alleged transactions and compliance personnel dismissals, setting a March 6 deadline for document production.

The 11 senators have asked Treasury and DOJ to provide a progress update by March 13.

Binance Response

Binance has denied the allegations.

In statements, the company said it identifies and reports suspicious activity to authorities and does not allow Iranian users on its platform. A spokesperson said sanctions exposure has been reduced by 97.3% since 2024 through strengthened compliance controls.

The exchange also criticized recent media reporting, calling certain claims inaccurate and defamatory, and emphasized that it has significantly overhauled its compliance framework following its 2023 settlement.

2023 Settlement Background

In November 2023, Binance pleaded guilty to federal charges including money laundering, operating an unlicensed money transmitting business, and sanctions violations. The company agreed to pay a record $4.3 billion penalty—the largest in crypto industry history—and committed to enhanced AML and sanctions monitoring.

Founder Changpeng Zhao stepped down as CEO and later served a short prison sentence as part of the resolution.

The current congressional scrutiny centers on whether Binance has fully adhered to the compliance obligations outlined in that agreement.

Broader Implications

If federal authorities determine that Binance violated the terms of its 2023 settlement, the exchange could face additional penalties or enforcement action. The case may also intensify regulatory pressure across the crypto industry, particularly around stablecoins, cross-border flows, and sanctions compliance.

The matter remains under review, with key agency response deadlines looming in early March.

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