US Senator opens probe into Binance over $1.7bn in alleged ties to terrorist groups

More than a dozen US senators have some serious questions about the crypto industry’s largest exchange.

Binance, which recorded more than $9.9 billion in volume today, is at the centre of a new investigation by the Committee on Homeland Security and Governmental Affairs.

Chaired by Republican Senator Rand Paul of Kentucky, the committee is urging the company to provide key records regarding alleged connections between the exchange and terrorist organisations working on behalf of Iran.

“I therefore demand that you provide the Permanent Subcommittee on Investigations records and information related to Binance’s role in Iranian money laundering and its repeated failure to prevent illicit use by sanctioned entities, terrorist organisations, and other criminal actors,” Connecticut Senator Richard Blumenthal, the ranking member of the Permanent Subcommittee on Investigations and a member of the Democratic Party, wrote on Tuesday.

Hexa Whale and Blessed Trust

The probe comes hot on the heels of explosive reports that allege Binance ignored internal warnings that sanctioned entities used the platform to launder nearly $2 billion in funds.

Specifically, the probe highlights company partners, Hexa Whale and Blessed Trust, which allegedly operated as intermediaries on behalf of Iranian government entities.

Chairman Paul’s inquiry relies on reporting from Fortune, The Wall Street Journal, and The New York Times, which cite anonymous sources and internal documents.

These reports paint a picture of a company that continues to struggle to fend off sanctioned entities on its platform, despite having been punished for similar offences in the past.

In 2023, Binance and its then-CEO, Changpeng Zhao, pleaded guilty to failing to implement adequate anti-money laundering and anti-terrorist financing safeguards on the exchange.

The company paid a record $4.3 billion fine in 2023 and agreed to oversight from two independent monitors to review its compliance practices. Zhao agreed to step down as CEO and spent four months in prison in 2024.

But from March 2024 to August 2025, Binance’s compliance team revealed that $1.7 billion had flowed through the crypto exchange to fund Iran-backed groups, such as Yemen’s Houthi militants, according to reports.

After revealing these flows, the compliance team was reportedly fired.

“Binance is a repeat offender,” Blumenthal wrote. “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.”

The probe also serves as another attack line for the Democrats, who have used Donald Trump’s crypto links to attack the president.

Trump pardoned Zhao in October. Blumenthal and others have linked the pardon with Binance’s business dealings with the Trump family’s crypto venture World Liberty Financial, using it to “evade accountability and influence the White House.”

Binance and Zhao have denied that the pardon was linked to the firm’s partnership with the Trump family’s venture.

Zhao appeared at the Trump family’s World Liberty Forum in February.

Binance bounces back

Binance has staunchly denied claims of misconduct.

“Recent reporting on Binance’s sanctions compliance relies on incomplete and mischaracterised accounts that do not reflect all of the facts and the full investigative record,” the company said on February 22.

“While we cannot comment on specific users or disclose details that could compromise ongoing inquiries, we can clarify the process followed and correct clear inaccuracies.”

Withers Bergman LLP, a law firm representing Binance, characterised the WSJ’s coverage as “false, seriously misleading to your readers, and defamatory of our client,” on February 24.

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at [e-mail].