Synopsis: Binance investigators uncover $1.7B crypto flows to Iran-linked groups, including Houthis. Four compliance staff fired after flagging issues; Senate demands records amid sanctions scrutiny.
The world’s largest crypto exchange is back under fire. Binance investigators discovered that roughly $1.7 billion moved from platform accounts to entities linked to Iran. Some of those entities reportedly have ties to terrorist organizations. The findings landed on the desks of top executives. Then, things got complicated.
Within weeks of raising the alarm, at least four investigators faced suspension or termination. The company says the dismissals had nothing to do with the findings. Critics, however, are not so sure.
A Shocking Paper Trail Inside Binance
In the middle of last year, Binance’s internal compliance team got a call. Israeli law enforcement wanted to talk about terror financing routes tied to Iran. That call kicked off a sprawling investigation.
Investigators used blockchain analysis tools to trace the money. They discovered two accounts at the center of the problem. The first belonged to a Hong Kong company called Hexa Whale Trading Limited. It moved about $490 million in crypto to wallets connected to Iranian networks. An Israeli official told the team that Hexa Whale was financing the Houthis an Iran-backed militia designated as a terrorist group.
Furthermore, investigators uncovered a second major player. A company called Blessed Trust, also based in Hong Kong, transferred over $1.2 billion to the same network. Blessed Trust was not just any account. It was an active business partner of Binance itself.
The money flowed primarily in Tether (USDT) stablecoin through the Tron blockchain. Investigators traced it to wallets linked to Iran’s Islamic Revolutionary Guard Corps, a U.S.-designated terrorist group.
Investigators Raise Alarms Then Lose Their Jobs
The findings reached Binance CEO Richard Teng and Chief Compliance Officer Noah Perlman in the fall of last year. The two lead investigators formally flagged the Blessed Trust connections. They recommended stronger action.
Then, on November 13, 2025, those two investigators were suspended. Days later, the colleagues who stepped in to continue the probe were locked out of Binance systems. They were suspended and fired shortly after.
In total, at least four to five compliance team members lost their roles. Additionally, more than half a dozen compliance officials left Binance in recent months, including a sanctions manager and the head of the enterprise compliance team.
The timing raised immediate questions. Was this retaliation for what the team found?
Binance spokesperson Rachel Conlan flatly denied it. She said the investigators were not dismissed for raising compliance concerns. Instead, she said certain individuals were disciplined for “unauthorized disclosure of confidential client information.” The investigation, she added, was never shut down.
Binance’s Defense and the Political Backdrop
Binance is pushing back hard. The company says it found no evidence of actual sanctions violations. It removed the Hexa Whale account in October 2025 after notifying the Justice Department. Binance stopped working with Blessed Trust in January 2026. On February 25, 2026, the company planned to submit a full report on Blessed Trust to the DOJ.
Meanwhile, Blessed Trust’s director, Leung Ka Kui, denied any wrongdoing. He said the company never knowingly made payments to Iranian entities and rejected the idea that its separation from Binance had anything to do with sanctions.
The political context, however, makes this story harder to ignore. Binance founder Changpeng Zhao built the exchange into a platform processing two-thirds of all global crypto trades at its peak. In 2023, he pleaded guilty to breaking anti-money-laundering laws. Binance paid a $4.3 billion fine. Zhao spent four months in federal prison.
Then, in October 2025, President Trump pardoned him. The Trump family’s crypto venture, World Liberty Financial, has business ties with Binance. Zhao attended a conference at Mar-a-Lago this month. “Learned a lot,” he posted on social media afterward.
White House press secretary Karoline Leavitt called Zhao’s prosecution a “war on cryptocurrency” by the previous administration.
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Senate Steps In, Scrutiny Grows
The story first broke on February 13, 2026, through Fortune. The New York Times and The Wall Street Journal expanded the reporting on February 23. By the next day, the U.S. Senate was already moving.
Senator Richard Blumenthal sent a formal letter to CEO Richard Teng on February 24, 2026. He demanded records on Hexa Whale and Blessed Trust, the $1.7 billion in flows, and the fired investigators. He also asked whether Binance had honored its 2023 commitments to U.S. authorities.
Binance responded by calling the reporting “inaccurate,” “distorted,” and based on “disgruntled former employees.” The company sent legal letters demanding retractions from The Wall Street Journal and Fortune.
As a result, the story has now reached the halls of Congress, the DOJ, the IRS, and the FBI all at once. The Senate probe is just beginning. Binance’s DOJ report is due today.
The central question remains unanswered. Did a maturing compliance program catch problems and respond properly? Or did executives sideline investigators who got too close to something big?
The answer could shape the future of crypto regulation in the United States.
Written By Fazal Ul Vahab C H
