U.S. federal prosecutors are investigating whether Binance violated American sanctions on Iran by allowing certain transactions to proceed, according to a Bloomberg report cited by Reuters. The inquiry places renewed attention on the exchange’s sanctions controls nearly three years after Binance reached a multibillion-dollar settlement with U.S. authorities.
The reported investigation is being handled by the Manhattan U.S. Attorney’s Office, with the Justice Department’s Criminal Division in Washington also involved. Investigators are examining Binance’s compliance efforts and whether the exchange knowingly allowed transactions that should have been blocked under U.S. sanctions.
The existence of an investigation does not establish that Binance violated sanctions or that criminal charges will follow. Reuters reported that the Justice Department declined to comment, while the Manhattan U.S. Attorney’s Office did not immediately respond to requests for comment.
Binance said it maintains a zero-tolerance approach to sanctions violations and cooperates with law enforcement. The exchange said it remains committed to identifying and shutting down bad actors operating through its platform.
Iran-Linked Funds Put Binance Compliance Under Scrutiny
The latest investigation comes shortly after U.S. prosecutors filed a separate civil forfeiture complaint seeking roughly $61 million in cryptocurrency allegedly connected to proceeds from the black-market sale of Iranian crude oil and petroleum products. The DOJ said the funds were intended to benefit the Iranian government and military-linked entities.
According to the DOJ complaint, two Chinese companies, Blessed Trust and Hexa Whale, used Binance trading accounts while allegedly handling proceeds from Iranian oil sales. Prosecutors said a broader network of cryptocurrency addresses had moved more than $1.5 billion in alleged illicit oil proceeds.
However, the forfeiture complaint is directed at the cryptocurrency identified by prosecutors and does not charge Binance with wrongdoing. The DOJ itself notes that allegations contained in a civil forfeiture complaint remain unproven unless a court enters judgment in favor of the government.
The developments have nevertheless brought renewed attention to how exchanges identify sanctioned users, businesses and transaction patterns. For large global platforms, sanctions screening can involve customer identification, wallet monitoring, transaction analysis and decisions about when accounts should be restricted or removed.
Binance has previously said that people resident or located in Iran are prohibited from accessing Binance.com. The exchange has also disputed some previous reporting concerning Iran-linked activity and has maintained that it works with authorities when suspicious activity is identified.
Binance’s 2023 Settlement Adds Context
The current scrutiny follows Binance’s November 2023 criminal resolution with U.S. authorities. The company pleaded guilty to violations involving the Bank Secrecy Act, operating an unregistered money-transmitting business and violating the International Emergency Economic Powers Act. Binance agreed to pay about $4.3 billion in penalties.
The 2023 resolution also resulted in major compliance requirements. Binance agreed to strengthen its compliance program and retain an independent monitor as part of the settlement, while founder Changpeng Zhao pleaded guilty to violating U.S. anti-money-laundering requirements and stepped down as chief executive.
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That history makes the reported Iran investigation significant for Binance’s compliance framework, because prosecutors are now examining whether controls were effective in preventing prohibited transactions. The key issue is not simply whether Iran-linked funds appeared on the platform, but what Binance knew and what actions its systems and compliance teams took.
For the wider crypto industry, the case highlights the continuing regulatory importance of sanctions compliance as digital-asset exchanges handle increasingly complex cross-border flows. U.S. authorities have continued using blockchain tracing, exchange records and traditional financial investigations to pursue funds linked to sanctioned activities.
The investigation remains ongoing, and the available reporting does not establish that Binance knowingly violated Iran sanctions. Any eventual charges, enforcement action or closure of the investigation would provide a clearer picture of prosecutors’ findings. For now, the exchange faces another round of scrutiny over the effectiveness of the compliance controls it has spent the past several years rebuilding.
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