US federal prosecutors are actively investigating Binance, the world’s largest cryptocurrency exchange by trading volume, for alleged violations of US sanctions against Iran. The probe, led by the Manhattan US attorney’s office with support from the Justice Department’s criminal division in Washington, is focused on whether Binance failed to prevent trades connected to Iranian entities.
Scope of the investigation
Sources familiar with the matter reported that authorities are seeking to determine if Binance knowingly allowed transactions on its platform that contravened restrictions imposed against Iran. The details of these transactions remain unclear, and it is not yet certain if charges will be filed. The Justice Department and the Manhattan US attorney’s office have declined to provide further comment on the ongoing inquiry.
Binance, for its part, reaffirmed its commitment to compliance and sanctions enforcement. The company stated, “We maintain a zero-tolerance policy for sanctions violations,” and emphasized ongoing cooperation with law enforcement agencies globally.
Binance reiterated zero-tolerance for sanctions violations and underscored its commitment to identifying and shutting down suspicious activity while cooperating with authorities.
Binance previously pleaded guilty to violations of US banking and sanctions laws, resulting in a $4.3 billion settlement and the appointment of two corporate monitors. At that time, co-founder Changpeng Zhao stepped down as chief executive and served a four-month prison sentence before being pardoned by President Donald Trump in 2023.
Allegations and responses
In February this year, Fortune reported that Binance internal investigators had flagged over $1 billion in transfers to Iran-linked entities. According to multiple media outlets, some compliance staff who raised concerns were subsequently dismissed. The New York Times later indicated the sum involved might reach $1.7 billion. US Senator Richard Blumenthal requested records from Binance regarding two entities, Hexa Whale and Blessed Trust, which were linked to these transactions.
Binance publicly contested these reports, claiming that internal reviews showed the true total sent to Iranian-linked wallets was no more than $126.1 million, and of this, up to $24.1 million potentially reached wallets connected to Iran’s Islamic Revolutionary Guard Corps (IRGC). The exchange also stated no employee had been dismissed for escalating compliance concerns and insisted its protocols were effective. Further, Binance has initiated legal action against one news outlet over its coverage of these events.
Binance asserted that its compliance process functioned effectively, disputing both the transaction amounts reported and the circumstances regarding staff dismissals, noting regional wallet links were only identified during investigations.
Last week, the entities Hexa Whale and Blessed Trust reappeared in the headlines after Manhattan prosecutors sought to seize $61 million allegedly originating from Iranian black-market oil sales and laundered through Binance. Prosecutors claim two Hong Kong-registered companies involved misrepresented their business activities. However, Binance has not been accused of wrongdoing in this specific case.
The Office of Foreign Assets Control (OFAC) expanded its jurisdiction in August, allowing it to designate any foreign person operating within Iran’s digital asset sector under Operation Economic Outcast, part of wider US Treasury efforts to combat sanctions evasion. In September, the US sanctioned several firms and individuals accused of financing Hezbollah and other Iranian proxies.
Mini dictionary: OFAC (Office of Foreign Assets Control) is a division of the US Department of the Treasury responsible for enforcing economic and trade sanctions based on US foreign policy and national security goals.
