Binance Under Investigation Over Iran, Russia Sanctions, Ties to WLFI Scrutinized

Created by Kornelija Poderskytė from DailyCoin

U.S. Senator Richard Blumenthal has initiated a formal inquiry into Binance, the world’s largest cryptocurrency exchange, following reports that the platform processed transactions linked to sanctioned Iranian entities and may have facilitated sanctions evasion related to Russian oil flows.

The investigation seeks internal records and compliance details from Binance leadership after media reporting suggested the exchange may have allowed large-scale transfers involving jurisdictions under U.S. sanctions scrutiny.

Binance Compliance Practices Under the Microscope

The letter, sent by Senator Blumenthal in his capacity on the U.S. Senate Permanent Subcommittee on Investigations (PSI, demands information regarding alleged violations of U.S. and international sanctions.

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The inquiry focuses on whether Binance knowingly facilitated illicit transactions and failed to prevent its platform from being used by sanctioned entities, terrorist organizations, and other criminal actors.

According to the document, Binance may have processed $1.7 billion in crypto transfers to Iran, enabled transactions linked to Russia’s “shadow fleet,” and handled funds supporting terrorist organizations, including Iran’s Islamic Revolutionary Guards Corps.

The investigation also examines internal compliance failures, alleging that the exchange ignored warnings, allowed illicit accounts to operate, granted VIP status to suspicious users, and retaliated against staff who raised concerns.

Alleged Compliance Failures and Political Influence

Binance is further accused of ignoring repeated warnings about illicit activity related to Iran and Russia, potentially facilitating terrorist financing and money laundering.

The letter alleges the exchange blocked compliance efforts, retaliated against investigators, and leveraged political influence through partnerships with World Liberty Financial (WLFI) and ties to the Trump family to shield itself from accountability.

“Instead of actually preventing illicit use, Binance has sought to evade accountability and influence the White House through lobbying and a financial partnership with World Liberty Financial (WLFI), the cryptocurrency firm owned by the sons of President Trump and his special envoy Steve Witkoff,” Blumenthal’s letter reads.

After an initial partnership between WLFI and Emirati Sheikh Tahnoon bin Zayed Al Nahyan, Binance became a “vital engine” for WLFI, with about 85% of its USD1 stablecoins held on the exchange, tightly linking the Trump family’s crypto ventures to Binance.

The letter also notes that this influence campaign appears to have succeeded: in May 2025, the SEC dismissed a lawsuit against Binance for misleading regulators, followed by the October presidential pardon of founder Changpeng Zhao.

Deadline for Records and Transparency

The Senate’s PSI member has demanded that Binance provide detailed records by March 6, 2026, including transactions and communications involving two Binance partners, Hexa Whale and Blessed Trust, suspected of acting as “intermediaries for laundering money and enabling trade with Iranian government entities.”

The request also covers the use of Tether (USDT) and USD1, a WLFI-issued stablecoin, in sanction evasion or terrorist financing, as well as documentation on the suspension or dismissal of compliance staff involved in investigating these issues.

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People Also Ask:

What are sanctions and why do they matter in crypto?

Sanctions are government-imposed restrictions on certain countries, entities, or individuals to prevent illegal or harmful activity. Crypto platforms must ensure users comply to avoid legal violations.

Who is WLFI and why is it mentioned?

World Liberty Financial (WLFI) is a cryptocurrency firm linked to the Trump family. The investigation examines Binance’s business dealings and partnerships with WLFI.

What happens if Binance is found non-compliant?

Possible outcomes include regulatory fines, stricter compliance requirements, reputational damage, and limitations on operating in certain jurisdictions.