U.S. Senate Launches Investigation Into Binance Crypto Transfers

What Led To Binance Investigation

Investigative reports published on February 23, 2026, by The Wall Street Journal, The New York Times, and Fortune triggered the current Binance investigation. Internal compliance investigators at Binance reportedly uncovered $1.7 billion in crypto transfers, mostly involving Tether (USDT) on the Tron blockchain. These transfers flowed through accounts tied to Hexa Whale and Blessed Trust and allegedly reached wallets linked to Iran’s Islamic Revolutionary Guard Corps, Yemen’s Houthi militants, and operators of Russia’s sanctioned shadow fleet oil tankers.

Investigators also identified more than 1,500 Binance accounts accessed from Iran. They recommended stricter know-your-customer enforcement and restrictions on high-risk users. However, reports claimed that Binance suspended or removed some compliance personnel who flagged these risks, which raised concerns about internal retaliation and oversight failures.

This situation follows Binance’s major regulatory settlement in November 2023. At that time, Binance and founder Changpeng Zhao pleaded guilty to sanctions violations and anti-money laundering failures. Authorities imposed a $4.3 billion penalty, and Zhao served a four-month prison sentence. Regulators also assigned an independent compliance monitor to oversee Binance’s operations. 

Binance’s Compliance Claims

Binance has strongly contested the allegations and defended its compliance record. Co-CEO Richard Teng accused media outlets of relying on inaccurate reporting and statements from former employees. He stated that Binance did not punish staff for raising compliance concerns and explained that some employees left voluntarily or for unrelated reasons.

In addition, Binance emphasized measurable improvements in its sanctions compliance. The company reported that sanctions-related exposure dropped from 0.284 percent of total volume in January 2024 to just 0.009 percent by July 2025. Direct exposure to Iranian exchanges declined by 97.3 percent, falling from $4.19 million to $110,000 by early 2026. 

Potential Implications of Binance Investigation

The Senate Permanent Subcommittee on Investigations has given Binance until March 6, 2026, to submit detailed records related to the Hong Kong intermediaries, Iranian activity, stablecoin usage, and internal personnel decisions. This deadline increases political and regulatory pressure as the Binance investigation progresses.

So far, markets have reacted calmly. BNB has shown only minor price fluctuations, which suggests that investors remain cautious but not alarmed. However, prolonged regulatory scrutiny could affect market sentiment and increase volatility, especially if investigators uncover compliance failures.

More importantly, the Binance investigation could influence broader crypto regulation. Regulators may impose stricter compliance requirements on exchanges, especially regarding sanctions enforcement and stablecoin monitoring.