U.S. Prosecutors Reportedly Probe Whether Binance Enabled Iran Sanctions Violations

Bloomberg and other outlets reported Sept. 21-22 that federal prosecutors in Manhattan and the Justice Department’s Criminal Division are investigating whether Binance, the world’s largest cryptocurrency exchange, permitted trades that violated U.S. sanctions on Iran. The matter is an active criminal probe, according to those reports, and no criminal charges against Binance have been announced.

The reported investigation comes days after the U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture complaint on Sept. 14 seeking to seize about $61 million in cryptocurrency that prosecutors allege were proceeds of black-market sales of Iranian crude and petroleum products. In that filing, prosecutors alleged that two Chinese companies, Blessed Trust Limited and Hexa Whale Trading Limited, used trading accounts at the UAE-based exchange Binance to launder proceeds of illicit Iranian oil sales and funnel funds to the Iranian government, its agents and/or proxies, including alleged transfers to addresses tied to Iran’s Islamic Revolutionary Guard Corps. The Justice Department said the broader network described in the complaint involved more than about $1.5 billion in alleged proceeds.

That Sept. 14 case is a civil asset-seizure action against cryptocurrency, not a criminal case against Binance. Binance was not charged in the forfeiture complaint. The New York Times reported Sept. 15 that “Binance was not charged with any wrongdoing” in that case.

Binance has pushed back on suggestions that it enabled sanctioned activity. In comments quoted by The New York Times, a Binance spokeswoman said, “This case was not filed against Binance and does not allege wrongdoing by Binance.” She also said, “Binance did not permit any transactions with sanctioned individuals.” More broadly, Binance has said it has “zero tolerance for sanctions violations or illicit activity,” that it cooperates with law enforcement, and that it investigates and restricts or freezes accounts where appropriate.

The reported new probe is especially consequential because Binance already reached a sweeping U.S. enforcement resolution in November 2023. Binance Holdings and founder Changpeng Zhao agreed to a coordinated resolution that included guilty pleas and more than $4.3 billion in penalties. At the time, the Justice Department said Binance had “willfully caused” transactions between U.S. users and users in comprehensively sanctioned jurisdictions, including Iran. DOJ said those violations included more than $898 million in trades between U.S. users and users in Iran from January 2018 to May 2022. That 2023 resolution also imposed an independent compliance monitor on the company.

The distinction between the two current matters is important. The Sept. 14 Southern District of New York filing is a civil forfeiture case aimed at seizing crypto that prosecutors say is tied to an Iranian oil-sanctions evasion network. The newly reported matter, by contrast, is a separate criminal investigation into whether Binance itself allowed or knowingly permitted sanctions-violating trades.

For now, the latest development remains a reported, unresolved investigation. No new criminal case has been filed against Binance, and prosecutors have not announced charges tied to the reported probe.