TL;DR
- US prosecutors are investigating whether Binance knowingly allowed trading that violated sanctions on Iran, but no charges have been filed.
- Bloomberg and Reuters both reported that the Southern District of New York and the Justice Department’s criminal division are involved.
- A week earlier, the same Manhattan office alleged that money from sanctioned Iranian oil sales moved through Binance accounts.
US federal prosecutors are investigating whether Binance knowingly allowed trading that violated sanctions on Iran, according to Bloomberg. Authorities have filed no charges and made no public accusation against the world’s largest crypto exchange.
Bloomberg published the report on September 22, citing people familiar with the matter who requested anonymity. According to those people, the US Attorney’s Office for the Southern District of New York leads the inquiry. The Justice Department’s criminal division in Washington is working alongside it.
Reuters later confirmed the probe through its own source, who named the same two offices. Spokespeople for both offices declined to comment. Binance responded that it maintains a zero-tolerance policy for sanctions violations and cooperates fully with law enforcement.
What prosecutors are reportedly examining
The Wall Street Journal first reported a Justice Department inquiry involving Iran and Binance in March. The Journal said prosecutors were examining whether Iran used the exchange to evade US sanctions. The newspaper could not say whether investigators were targeting Binance, its users or both.
At the time, Binance told reporters it knew of no Justice Department investigation. The exchange sued Dow Jones, the Journal’s publisher, for defamation.
Bloomberg’s report puts Binance’s own conduct at the center of the case. Its sources describe prosecutors testing whether the exchange knew about the prohibited trading and let it continue. The report does not identify the specific transactions under review, and Bloomberg noted the investigation could close without charges.
>>> Read more: Binance Restricts 16 Crypto Platforms Over Sanctions
Why sanctions screening is difficult for exchanges
Crypto exchanges must assess more than a customer’s stated country of residence. They can also screen names, wallet addresses, device information and transaction patterns for links to sanctioned people or entities.
Blockchain transfers can pass through many addresses before reaching an exchange. Customers may also use companies, intermediaries or accounts outside the sanctioned country. Each added layer makes the origin and purpose of funds harder to establish.
US sanctions on Iran mainly bind US persons and transactions that pass through the US financial system. Iran-linked activity outside those limits is not automatically a violation.
What the probe means for customers today
Binance has responded to the report only with its statement on sanctions policy. It has announced no change to customer services.
A confirmed enforcement action could affect customers more directly. Exchanges under sanctions pressure may tighten identity checks and review deposits and withdrawals more closely. Banks and other counter-parties may reassess their exposure as well.
>>> Read more: Binance.US USD Services Reinstated After Suspension
Earlier cases are context, not proof
Binance reached a $4.3 billion US settlement in 2023 over failures to comply with anti-money-laundering and sanctions laws. Its founder, Changpeng Zhao, also pleaded guilty to an anti-money-laundering charge.
On September 14, the same Manhattan office filed a civil forfeiture complaint against about $61 million in cryptocurrency. Prosecutors allege two Chinese companies used Binance trading accounts to launder money from illicit Iranian oil sales. The complaint targets the funds themselves and accuses Binance of no wrongdoing. Separate Treasury sanctions against crypto businesses linked to Iran involve other parties. None of the earlier actions shows that Binance knowingly allowed the trading now under review.
Binance accepted independent compliance monitors under its 2023 plea agreement. Crypto news site Blockhead argues proven breaches after the plea could expose Binance to claims it broke the agreement.
