Binance faces U.S. probe over alleged Iran sanctions bypass

Federal prosecutors in Manhattan and the Justice Department are investigating whether Binance knowingly permitted users to bypass U.S. sanctions on Iran, according to CoinDesk’s report published Sept. 22. The new detail is the focus on Binance’s knowledge and actions, after earlier reports described a DOJ probe without making clear whether the exchange, its users or both were under examination.

The U.S. attorney’s office in Manhattan is responsible for investigating Binance’s compliance efforts. The Justice Department’s criminal division in Washington, D.C., is collaborating with the inquiry. The fact sheet does not identify the specific transactions prosecutors are examining or say whether charges will be filed.

That distinction matters for Binance’s sanctions controls. The allegation is not simply that Iran-linked funds passed through the platform; prosecutors are examining whether Binance knowingly allowed users to bypass U.S. restrictions.

Binance’s stated position is direct. A spokesperson said: “We maintain a zero-tolerance policy for sanctions violations. We fully cooperate with law enforcement, and we remain committed to rooting out and shutting down bad actors.” Richard Teng, Binance’s co-CEO, separately described reporting about the company as “inaccurate reporting about our compliance program.”

The company points to the scale of that program. Binance said in a February blog post that more than 1,500 people, or about 25% of its global headcount, worked on compliance. Using the company’s own figures, 1,500 divided by 25% implies a global headcount of roughly 6,000. Because Binance said “about” 25%, that 6,000 figure is an estimate rather than a confirmed headcount.

The investigation lands against a record that already includes a U.S. resolution. Binance pleaded guilty to banking compliance violations in 2023 and agreed to pay $4.3 billion in fines. Co-founder Changpeng Zhao stepped down as chief executive, served four months in prison and was pardoned by President Donald Trump last year.

The Iran-related allegations have produced sharply different figures. Decrypt reported that Fortune said on Feb. 13 that internal investigators found more than $1 billion moving through Binance to Iran-linked entities and were then dismissed. The Wall Street Journal reported on Feb. 23 about those firings, while The New York Times reported the same day that $1.7 billion was sent to Iranian entities.

Binance rejected that account in a March 10 post. It said at most $126.1 million reached wallets linked to Iran after multiple hops, and at most $24.1 million reached wallets related to Iran’s Islamic Revolutionary Guard Corps, or IRGC.

The arithmetic shows the scale of the disagreement. Binance’s $126.1 million upper bound is about 7.4% of the $1.7 billion figure reported by The New York Times: $126.1 million divided by $1.7 billion. Its $24.1 million IRGC-related upper bound is about 1.4% of that same figure. Those percentages compare reported upper bounds with a reported total; they do not resolve whether the underlying transaction sets or tracing methods were the same.

Senator Richard Blumenthal initiated a probe in February into alleged sanctions violations at Binance totaling $1.7 billion. Binance responded that it found no evidence supporting the allegations. In March, the exchange filed a defamation lawsuit against Dow Jones, the publisher of The Wall Street Journal.

A separate enforcement action has brought a concrete dollar amount closer to the current investigation. In the week before Sept. 22, Manhattan prosecutors sought forfeiture of $61 million, saying the money came from Iranian black-market oil sales and was laundered through Binance. The fact sheet does not say whether that forfeiture request is part of the transactions now being examined for possible knowing conduct.

The regulatory setting has also tightened. In August, the Office of Foreign Assets Control gave itself authority to designate any foreign person operating in Iran’s digital-asset sector, wherever that person is based. On Sept. 10, Washington sanctioned firms and individuals it said finance Hezbollah and other Iranian proxies.

For Binance, the immediate consequence is a new federal examination of whether its compliance controls failed knowingly, despite the company’s stated policy and claimed staffing. No deadline for the investigation or decision on charges has been disclosed.