DOJ Reopens Investigation into Binance Over Iran Sanctions
The U.S. Department of Justice is once again scrutinizing Binance, the world’s largest cryptocurrency exchange, to determine if it knowingly allowed transactions involving Iran, potentially violating U.S. sanctions. The probe is being jointly led by the U.S. Attorney’s Office for the Southern District of New York and the DOJ’s Criminal Division. This development follows a civil forfeiture case filed last week by Manhattan prosecutors seeking to seize $61 million.
Federal prosecutors are investigating whether Binance breached U.S. sanctions against Iran by failing to block certain transactions on its platform, according to a report by Bloomberg. The investigation, spearheaded by the Manhattan U.S. Attorney’s Office with the DOJ’s Criminal Division also involved, is focused on whether Binance tacitly permitted such transactions while aware of their nature.
Sources familiar with the matter told Bloomberg that prosecutors are examining Binance’s compliance measures, though specific transactions under scrutiny have not been disclosed. While the DOJ’s investigation may not result in any charges, the signal it sends is significant: this marks another instance of Binance facing federal scrutiny over Iran sanctions, following its $4.3 billion guilty plea in 2023.
Spokespersons for the Manhattan U.S. Attorney’s Office and the DOJ declined to comment. Binance issued a statement asserting, “We have a zero-tolerance policy for sanctions violations and fully cooperate with law enforcement to continuously root out and block malicious actors.”
This latest investigation is not an isolated event. Just last week, the Manhattan U.S. Attorney’s Office filed a civil forfeiture complaint seeking to seize $61 million allegedly laundered through Binance from illicit Iranian oil sales. Notably, that case did not accuse Binance itself of wrongdoing but targeted two Hong Kong-registered companies, accusing them of misrepresenting commercial activities.
Following that filing, Binance reiterated its commitment to not allowing any transactions involving sanctioned entities and pledged continued cooperation. The proximity of these two events highlights a persistent compliance concern: financial flows related to Iran.
Binance has spent the past three years attempting to cultivate an image of cooperation with law enforcement. In 2023, the company pleaded guilty to multiple U.S. departmental investigations, admitting to failures in complying with U.S. banking and sanctions regulations. It agreed to pay a $4.3 billion fine and accept oversight from two corporate compliance monitors. Co-founder Changpeng Zhao (CZ) also pleaded guilty to failing to establish an effective anti-money laundering regime, stepped down as CEO, and was pardoned by former President Trump after serving four months.
Since then, Binance has emphasized the expansion of its compliance team to over 1,500 individuals, representing approximately 25% of its global workforce. In a March blog post, the company stated, “No exchange can guarantee that risk will never touch its platform; the key is whether risk is detected, investigated, mitigated, and reported when it arises.”
The expansion of the compliance team also comes against the backdrop of an internal investigation that surfaced in February. Reports from media outlets including Fortune, The Wall Street Journal, and The New York Times indicated that Binance’s internal probe uncovered over $1 billion in funds flowing through the platform to Iran-related entities. While Binance disputed certain details of these reports, it simultaneously stated its cooperation with law enforcement and maintained the robustness of its compliance systems.
As the U.S. and Israel continue to exert pressure on Iran, the DOJ has recently engaged in multiple enforcement actions targeting the country. For Binance, as the world’s largest cryptocurrency exchange, any compliance lapse carries the potential to become the starting point for future legal cases.
