Binance faces Senate probe over $1.7B Iran-linked flows

US Senate probe targets alleged $1.7B Iran-linked flows via Binance

According to CoinDesk, Senator Richard Blumenthal has opened a Senate probe into Binance after reports that about $1.7 billion flowed from accounts on the exchange to Iran-linked entities. The inquiry focuses on potential sanctions lapses and internal controls.

The action follows media investigations and raises questions about how screening and escalation processes were applied to high-risk exposure. The scope centers on whether controls were calibrated to detect and block prohibited activity.

Why alleged Iran-linked flows matter for sanctions compliance

Under U.S. sanctions law administered by the Office of Foreign Assets Control, financial platforms must block dealings with designated parties and maintain effective risk-based compliance programs. These include customer due diligence, wallet screening, and timely escalation.

According to the U.S. Treasury, Binance entered a $4.3 billion settlement in 2023 and accepted independent monitorship addressing anti–money laundering and sanctions controls. Any post-settlement exposure would be assessed against those remediation commitments.

Allegations of subsequent flows raise questions about whether alerting, investigations, and reporting worked as intended. On-chain attribution can be probabilistic, so flagged wallets do not always equate to confirmed sanctioned counterparties.

For users, immediate effects may include tighter wallet screening, delayed withdrawals from high‑risk sources, or account reviews. Binance has disputed the allegations and says compliance investigations operate independently of commercial teams, according to CCN.

Legal specialists have highlighted governance risks if internal escalations were discouraged. “That’s rather shocking that that happened under a monitorship with [Binance] internal investigators,” said Robert Appleton, former DOJ official, as reported by Fortune.

For regulators, the probe may shape supervisory priorities and any coordination with the independent monitor. Binance says its exposure to sanctioned jurisdictions has fallen about 97% since January 2024, representing roughly 0.009% of volume, as reported by Coinpaper.

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Potential legal exposure and oversight under OFAC monitorship

If violations are substantiated, potential exposure could include additional civil penalties, mandated remediation, enhanced reporting, or operational restrictions under OFAC expectations. Any repeat findings post‑settlement could weigh on the monitor’s assessments and recommendations.

What the Senate letter seeks from Binance and timelines

According to Senator Richard Blumenthal’s office, a February 24, 2026 letter to CEO Richard Teng requests documentation on the reported $1.7 billion flows, related screening controls, and handling of internal findings, establishing the initial response timeline. The letter also flags concerns about treatment of internal investigators.

How monitorship expectations intersect with alleged 2024–2025 flows

Because the allegations concern activity after the 2023 settlement, any such flows would be evaluated against the monitor’s baseline: sanctions screening effectiveness, alert review quality, and escalation pathways. Confirmed gaps could trigger remediation steps and closer oversight.

FAQ about US Senate probe Binance

What is the evidence behind the reported $1.7 billion in transfers to Iran-linked entities and over what period did it occur?

The Wall Street Journal reported Binance investigators traced about $1.7 billion to Iran-linked wallets during 2024–2025, prompting internal disputes and external scrutiny.

How has Binance responded to the allegations and what compliance measures does it say are in place?

Binance disputes the claims and says dismissals involved protocol breaches; it states compliance probes follow law and procedures, according to Iran Times.