Cryptocurrency exchange Binance is facing intensified scrutiny from U.S. lawmakers following a report from The Wall Street Journal and the launch of two separate Senate inquiries. The WSJ report alleged that Binance fired internal investigators who raised concerns about transactions linked to sanctioned Iranian entities, involving over $1 billion. The report further suggested the internal probe was shut down shortly after a presidential pardon was granted to Binance founder Changpeng "CZ" Zhao.
In a forceful response, Binance CEO Richard Teng called the allegations "false and defamatory," denied that employees were fired for reporting suspicious activity, and reiterated the company's commitment to rigorous compliance standards. Binance has threatened legal action and demanded a correction from the newspaper.
The controversy has now reached the U.S. Congress. On one front, Democratic Senator Richard Blumenthal initiated a formal probe through the Senate's Permanent Subcommittee on Investigations. In a letter dated February 24 to CEO Richard Teng, Blumenthal cited reports suggesting Binance facilitated "large-scale violations" of sanctions on Iran, potentially involving $1.7 billion in transactions, and ignored warnings aimed at reducing Iranian money laundering.
Simultaneously, eleven Democrats on the Senate Banking Committee, led by Senator Elizabeth Warren, sent a letter to Attorney General Pam Bondi and Treasury Secretary Scott Bessent. They urged a "thorough, impartial" investigation into whether Binance's operations, including the alleged Iran-linked transactions, violate the terms of its 2023 settlement with U.S. authorities. That settlement had led to CZ's resignation. The lawmakers also referenced Binance's expanding business ties with former President Donald Trump's crypto ventures and Trump's pardon of Zhao.
Binance has denied all allegations of sanctions violations, stating an internal review found "no evidence" of such breaches. The outcome of the Senate inquiries and any potential legal battle with the WSJ could significantly influence how regulatory compliance is assessed across the crypto industry.
