Crypto Exchange Binance hit with new Senate letter over Iran-linked transaction questions
crypto exchange binance is facing renewed pressure on Capitol Hill after Senator Richard Blumenthal sent a follow-up letter to co-CEO Richard Teng on April 1 (ET). The letter presses the company to explain what the senator calls apparent discrepancies between prior testimony to the Senate and later reporting about transactions tied to Iran. Blumenthal also demands documents, records, and clearer answers on compliance practices and the exchange’s responsiveness to law enforcement warnings.
Senator Blumenthal escalates scrutiny with demands for wallets, records, and methodology
In the April 1 letter, Senator Richard Blumenthal, a New Haven Democrat, said he is concerned the company may have provided “misrepresentations or misleading information to the Subcommittee and to the public. ” He asked for the documents and records the company relied on when preparing earlier responses to the Senate Permanent Subcommittee on Investigations (PSI).
The letter highlights a gap between a $110, 000 figure the company previously cited for direct transactions with four major Iranian exchanges and separate reporting that traced roughly $1. 7 billion in flows from accounts linked to the platform to entities with ties to Iran. Blumenthal wrote that this gap, along with what he described as partial or delayed production of requested materials to PSI, raised “further alarms about its candor and compliance with Congressional oversight. ”
Blumenthal’s requests include whether any accounts sent or received funds to or from Iran-linked wallets referenced in the reporting, along with the wallet addresses. He also demanded a full, year-over-year accounting of transactions between the exchange and known Iranian exchanges, and an explanation of the methodology used to calculate the $110, 000 figure, including whether transfers later associated with Iranian exchanges were counted.
Crypto Exchange Binance pushed on compliance tools, staff discipline claims, and law enforcement timelines
Beyond transaction tracing, the senator pressed for details on internal compliance practices, including whether the exchange has removed, weakened, or relaxed any detection, screening, freezing, or reporting mechanisms since January 1, 2025, including tools intended to spot illicit indirect transfers. Blumenthal also sought clarity on whether the company has ever declined to investigate, suspend, or remove accounts tied to individuals inside Iran, including users employing VPNs or “drop accounts, ” described as KYC-verified accounts that are bought, shared, or stolen.
The letter also raised the issue of internal consequences for compliance staff, referencing reports that the company dismissed personnel for “unauthorized disclosure. ” Blumenthal asked whether the exchange had ever disciplined compliance staff who raised concerns internally or provided information to law enforcement or external partners.
In additional criticism, Blumenthal described what he characterized as delayed or inadequate actions following law enforcement warnings. He wrote that the exchange took two months to respond to law enforcement regarding alleged terrorist financing by entities such as Hexa Whale and another two months to remove an implicated shell entity. He also alleged it took at least five months to remove Blessed Trust as a vendor after warnings about suspected terrorist financing.
Blumenthal further alleged the platform, in some cases, labeled certain accounts with internal tags like “Don’t block. Internal accounts, ” arguing those labels should have prompted heightened scrutiny rather than protection from enforcement.
Immediate reactions: Binance denies retaliation claims; executives defend compliance posture
In public remarks addressing related allegations, co-CEO Richard Teng said investigators “will not and will never be let go from Binance because of escalating compliance concerns, ” adding that the company needs investigators to escalate issues quickly “so that we can safeguard the platform. ” Teng also said the company will not compromise on “upholding global standards, working with global regulators, [and] upholding the rule of law including on sanctions and counterterrorism financing. ”
Binance Chief Compliance Officer Noah Perlman rejected the idea that staff were dismissed for raising issues, saying, “The idea that we would dismiss employees for raising something — it’s just actually preposterous on its face, as evidenced by the fact that the investigation continued, the relevant accounts were offboarded and relevant reporting was made. ”
Executives have also said the company sent formal legal letters to seek corrections and retractions of what they described as defamatory statements.
Quick context and what’s next
The Senate letter centers on transaction tracing tied to Iran, questions about the exchange’s past statements to investigators, and whether compliance controls and investigative follow-through matched the risks described in the reporting.
Next, the company faces a detailed set of document demands and timeline questions, including exact dates tied to account openings, reported activity, law-enforcement notifications, and suspensions or removals. Any response from crypto exchange binance will be measured against the senator’s focus on candor to PSI and the completeness of records handed over to Congressional oversight.
