U.S. federal prosecutors are investigating whether Binance violated sanctions on Iran by not stopping certain trading activity on its platform, according to a report Monday citing people familiar with the matter. The Manhattan U.S. attorney's office is leading the inquiry, with the Justice Department's criminal division in Washington also involved. Authorities are examining whether the exchange knowingly allowed the trading to occur.
The specific transactions under examination remain unclear. Justice Department investigations can conclude without charges being filed. Spokespeople for both the department and the Manhattan U.S. attorney's office declined to comment.
In response, Binance stated: "We maintain a zero-tolerance policy for sanctions violations," adding that it cooperates with law enforcement.
This investigation follows a history of compliance issues at the exchange. Binance pleaded guilty nearly three years ago to failing to comply with U.S. banking and sanctions law, resulting in a $4.3 billion penalty and the placement of two corporate monitors. Co-founder Changpeng Zhao stepped down as chief executive, served four months in prison, and received a pardon from President Donald Trump last year.
Recent reporting has drawn scrutiny to Iran-related transactions on the platform. Multiple news outlets reported in mid-February that internal investigators had identified substantial sums moving through Binance to Iran-linked entities, with some investigators subsequently dismissed. Senator Richard Blumenthal opened a preliminary inquiry and requested records on two entities: Hexa Whale and Blessed Trust.
Binance disputed these accounts in a March statement, saying the funds neither originated nor terminated on its platform. The exchange claimed that at most $126.1 million reached wallets linked to Iran following multiple transfers, with at most $24.1 million reaching IRGC-related wallets. Binance stated that Iranian connections were identified only after it began investigating, and denied that employees were dismissed for raising compliance concerns.
Last week, Manhattan prosecutors sought forfeiture of $61 million they alleged came from Iranian black-market oil sales and was laundered through Binance. Prosecutors identified two Hong Kong-registered companies as having misrepresented their business activities. Binance was not accused of wrongdoing in that forfeiture action.
The enforcement activity reflects broader U.S. sanctions efforts targeting Iran's digital asset sector. Treasury designated itself the power in August to identify any foreign person operating in Iran's digital asset sector, regardless of location. Washington sanctioned additional firms and individuals in September it said finance Hezbollah and other Iranian proxies.
