Binance and Tether Face Renewed Scrutiny Over Illicit Crypto Transactions
Blumenthal’s inquiry into Binance focuses partly on allegations that the exchange facilitated transactions involving sanctioned entities linked to Iran and Russia.
In February, the senator requested information about an alleged $1.7 billion in transactions connected to sanctioned networks. The inquiry added to previous regulatory scrutiny surrounding the exchange’s anti-money-laundering practices.
He subsequently questioned whether Binance had fulfilled the compliance obligations established under its previous US regulatory settlements.
Tether faces a separate inquiry concerning the use of its $USDT stablecoin in Iranian financial networks.
Blumenthal’s September report alleged that $USDT had become an important component of Iran’s shadow banking infrastructure, while an October investigation raised additional questions about payments involving a consulting firm associated with a former White House cryptocurrency official.
These remain allegations and congressional findings that have not been established as criminal violations by either company.
Trump-Linked Crypto Companies Asked to Produce Financial Records
World Liberty Financial and Fight Fight Fight LLC are also facing renewed demands over their financial relationships with the Trump family and foreign investors.
Blumenthal initially opened an investigation in May 2025 into potential conflicts involving World Liberty Financial and the TRUMP cryptocurrency.
The inquiry includes questions about ownership structures, foreign investments and potential financial benefits connected to government decisions.
Those concerns intensified following a reported $500 million investment in World Liberty Financial linked to the United Arab Emirates. The transaction subsequently prompted congressional concerns about foreign influence.
Other lawmakers have separately requested federal investigations into the investment’s national-security implications.
World Liberty Financial’s banking ambitions have also attracted scrutiny over potential conflicts of interest and regulatory oversight.
In his latest letters, Blumenthal instructed World Liberty Financial and Fight Fight Fight LLC to begin producing records by November 30, with January 4 serving as the deadline before additional measures could be considered.
Senate Investigation Could Escalate in January 2027
The January deadline could become significant as Blumenthal prepares to assume leadership of the Permanent Subcommittee on Investigations.
The panel can conduct hearings, demand documents and pursue compulsory investigative processes through applicable Senate procedures.
However, Blumenthal’s November 5 warning does not automatically authorize subpoenas or impose penalties on recipients.
The latest demands come amid broader congressional debate over cryptocurrency regulation, including questions about SEC enforcement against major digital asset companies.
They also follow previous legislative concerns over potential conflicts involving cryptocurrency policy and businesses connected to the Trump family.
