Lawmakers Press for Investigation Into Binance Over Sanctions Concerns

Senators press federal agencies to examine Binance’s anti-money laundering controls and USD1 stablecoin links.

Pressure is mounting on Binance as U.S. lawmakers call for closer federal scrutiny. Nine Democratic senators have asked top officials to review the exchange’s sanctions compliance and anti-money laundering controls. The request adds new tension as Congress debates stricter rules for the crypto industry.

U.S. Senators Question Binance’s Settlement Compliance and Internal Controls

Nine Democratic senators sent a letter Friday to Treasury Secretary Scott Bessent and Attorney General Pam Bondi. They urged both departments to review Binance’s compliance with U.S. sanctions laws and illicit finance rules. Signatories include Elizabeth Warren, Ruben Gallego, Angela Alsobrooks, and Mark Warner.

Lawmakers cited recent reports alleging large sums moved through Binance to terrorist groups or sanctions evaders. Those reports also claimed the exchange dismissed compliance staff involved in identifying suspicious transactions. Senators said such allegations point to weaknesses in Binance’s internal controls.

“These allegations raise grave concerns that poor illicit finance controls at Binance remain a significant threat to national security,” the letter states. Senators also asked the agencies to assess Binance’s adherence to requirements from its 2023 settlement with U.S. authorities.

Earlier in the week, Richard Blumenthal said he had sent a letter to Binance asking for more details. He serves as a senior member of the Senate Homeland Security Committee.

However, Democrats are not the majority party in the Senate right now. That means they cannot easily start official investigations through committees.

Interestingly, Binance rejected the allegations. Co-CEO Richard Teng called the earlier reports “inaccurate” and “defamatory.” At the same time, Congress is still working on the Digital Asset Market Clarity Act.

Senators are debating how strict crypto companies’ anti-money laundering and sanctions rules should be. Senator Mark Warner is leading efforts among Democrats to shape those rules.

Binance’s Stablecoin Deal and CZ Pardon Surface in Senate Letter

In the letter, lawmakers also raised concerns about Binance’s ties to ventures linked to President Donald Trump and his family. Their letter referenced Binance’s promotion of USD1, a stablecoin issued by World Liberty Financial. According to senators, Binance offered interest incentives to users holding USD1 and provided technical support for the token.

The letter further alleged that Binance accepted a $2 billion investment connected to the stablecoin project. Senators questioned whether those business relationships warrant closer review, especially with concerns about sanctions compliance.

Lawmakers also referenced Binance founder Changpeng Zhao. In 2023, CZ admitted to failing to set up a proper anti-money laundering program and served four months in prison. They noted that President Donald Trump later granted him a pardon.

Senators believe weak compliance rules in crypto companies could make it easier for criminals to move funds. Their letter asks Treasury and Justice officials to clarify whether Binance has fully met its legal obligations. So far, those agencies have not publicly commented on plans to start a formal investigation.