The U.S. Department of Justice has officially begun investigating whether Binance, the world's largest cryptocurrency exchange, knowingly violated Iran sanctions by facilitating capital flows through its platform. According to Bloomberg News, federal prosecutors in Manhattan, New York, are reviewing whether the exchange was aware of the Iranian capital flows, with the DOJ's criminal division also involved in the investigation. The probe adds to Binance's history of regulatory and legal challenges in the United States, particularly involving anti-money laundering controls and compliance with financial sanctions. The investigation comes as U.S. regulators and law enforcement agencies continue to increase scrutiny of cryptocurrency exchanges over sanctions compliance, money laundering risks and cross-border transactions.
A separate court action filed on September 14 provides fresh public records concerning Iran-linked funds that moved through accounts on Binance. The Southern District of New York filed a verified civil forfeiture complaint seeking all USDT held in 10 cryptocurrency addresses, valued at approximately $61 million. Prosecutors alleged the targeted cryptocurrency represented proceeds from black-market Iranian crude oil and petroleum sales, intended to finance Iranian government and military bodies, including the Islamic Revolutionary Guard Corps. The complaint names two Chinese companies, Blessed Trust and Hexa Whale, which allegedly used Binance trading accounts while handling proceeds connected with Iranian oil sales. Notably, prosecutors did not allege any wrongdoing by Binance in that lawsuit, with authorities examining whether the exchange knowingly permitted sanctioned parties to use its platform.
According to AMBCrypto, Binance allegedly fired internal investigators that first found the Iranian illicit flows on the platform. In response to the DOJ's push to recover the $61 million, Binance CEO Richard Teng clarified that the exchange had no wrongdoing and the DOJ had not filed any case against it. Teng maintained that they do not tolerate sanctioned individuals and would swiftly hand any culprit to the authorities. The company responded that it maintains a zero-tolerance policy for sanctions violations and fully cooperates with law enforcement. According to Reuters, the company said it has more than 1,500 people working in compliance-related functions, representing roughly 25% of its global workforce. Binance reported processing more than 71,000 law-enforcement requests during 2025 and claimed exposure to four major Iranian crypto exchanges fell 97.3%, from $4.19 million to $110,000 over two years.
The current scrutiny follows Binance's November 2023 criminal resolution with U.S. authorities, where the exchange pleaded guilty to offenses involving the Bank Secrecy Act, operating an unregistered money-transmitting business and violating the International Emergency Economic Powers Act. Binance agreed to a total criminal financial penalty of $4.316 billion. In that case, founder Changpeng Zhao pleaded guilty to failing to maintain an effective anti-money laundering program, stepped down as CEO, and was sentenced to four months in prison. The settlement required Binance to retain an independent compliance monitor for three years and improve its anti-money-laundering and sanctions systems. In February, reports suggested the dismissals were linked to findings of capital flows from sanctioned Iranian entities to the platform, with the two Chinese accounts at the center of those investigations. In March, Binance filed a defamation lawsuit against Dow Jones after the newspaper published reports claiming the U.S. Justice Department was investigating alleged sanctions violations.
The latest investigation comes as U.S. prosecutors have adopted a more aggressive enforcement posture toward financial activity involving Iran. As U.S. and Israeli military actions against Iran have continued, U.S. lawmakers have expressed concern that digital assets could be used to evade economic sanctions, with some senators recently requesting updates from Binance's compliance monitor. Over $1 billion in crypto funds tied to the Iranian regime has been frozen by the U.S. Treasury since the Israel-Iran war began earlier this year. Law enforcement agencies have stepped up regulatory pressure on cryptocurrency firms operating in the United States, particularly platforms suspected of facilitating illicit transactions or circumventing national restrictions. The U.S. Justice Department has historically taken months or even years to investigate before deciding whether to bring criminal charges, and as of now, the Justice Department has not issued any public statement on the matter, with the investigation remaining ongoing. The reported Binance probe highlights the continuing scrutiny faced by global cryptocurrency platforms over their ability to prevent sanctioned entities and jurisdictions from accessing financial services.
