A senior United States senator has launched a congressional inquiry into global cryptocurrency exchange Binance after fresh media reports alleged the platform processed billions of dollars in transactions linked to sanctioned Iranian entities and Russia’s oil trade network.

Senator Richard Blumenthal, ranking member of the Senate Permanent Subcommittee on Investigations, has formally requested documents from Binance leadership, raising concerns about whether the company complied with US sanctions laws and its previous settlement obligations.

Lawmaker Seeks Internal Records on Sanctions Controls

In a letter addressed to Binance CEO Richard Teng, Blumenthal asked the exchange to provide internal communications, compliance reports and account records tied to its sanctions monitoring systems.

The inquiry follows recent reporting by major publications that claimed Binance processed roughly $1.7 billion in transactions connected to Iranian entities and vessels involved in transporting Russian oil outside Western sanctions frameworks. According to those reports, internal compliance teams at Binance had flagged two partner firms, Hexa Whale and Blessed Trust, as intermediaries facilitating trades involving Iranian government-linked organizations.

Investigators cited in the reports allegedly traced certain transfers to wallets associated with Iran’s Islamic Revolutionary Guards Corps and to payments made to crews operating tankers described as part of Russia’s oil shadow fleet.

In his letter, Blumenthal wrote that Binance appeared to have overlooked warning signs and allowed suspicious accounts to continue operating. He also asked for details about any internal investigations into users connected to Iran or networks accused of helping Russia evade sanctions.

The senator has set a March 6 deadline for Binance to respond.

Binance Rejects Allegations

Binance has strongly denied the claims. A company spokesperson said the exchange actively flags and reports suspicious activity and does not permit Iranian users on its platform.

The spokesperson also pushed back against recent media coverage, stating that Binance has significantly upgraded its compliance systems over the past several years. According to the company, its transformation included tighter know your customer procedures, enhanced transaction monitoring and expanded cooperation with regulators.

Earlier this week, Teng criticized a Wall Street Journal report describing $1.7 billion in Iran-linked transfers as defamatory and called for a retraction. In a separate blog post, Binance stated that its exposure to sanctioned or high-risk jurisdictions has dropped sharply since January 2024, claiming a 97 percent reduction to roughly 0.009 percent of total exchange volume.

The exchange previously dismissed similar claims in a Fortune report that alleged more than $1 billion in transactions were linked to Iran. Binance has maintained that it investigates compliance concerns and reports relevant findings to authorities.

Shadow Fleet and Sanctions Concerns

The controversy centers partly on what analysts call Russia’s oil shadow fleet, a network of tankers and intermediaries used to move oil exports despite Western sanctions imposed after Moscow’s invasion of Ukraine. Reports suggest that some transactions processed through Binance may have supported operators connected to this trade.

US authorities have tightened restrictions on financial channels that could be used to bypass sanctions targeting both Iran and Russia. Crypto platforms have increasingly come under scrutiny as regulators examine whether digital assets can be used to move funds outside traditional banking systems.

Blumenthal’s letter signals that lawmakers remain wary of potential gaps in crypto compliance systems, particularly at large global exchanges operating across multiple jurisdictions.

Past Settlement With US Authorities

The new probe comes less than two years after Binance reached a landmark settlement with US regulators. In 2023, the company agreed to pay $4.3 billion to resolve charges related to Anti Money Laundering and sanctions violations.

As part of that agreement, Binance founder Changpeng Zhao stepped down as chief executive and later served a four month prison sentence. The company also accepted the appointment of an independent monitor and committed to strengthening its compliance framework.

Blumenthal’s letter suggests that the newly reported transactions could raise questions about whether Binance is fully adhering to the terms of that settlement. Lawmakers are expected to review any materials submitted by the company to determine whether further action is necessary.

For now, Binance maintains that it has reformed its internal systems and operates under strict regulatory oversight. The coming weeks may determine whether the latest allegations lead to further legal or political consequences for the world’s largest crypto exchange.