Binance in Trouble Again? U.S. Probes Possible Iran Sanctions Violations

U.S. prosecutors are once again putting the world’s largest crypto exchange Binance under scrutiny over Iran sanctions. A new probe is examining whether Binance allowed Iran-linked transactions to pass through its platform.

Meanwhile, responding to this probe, Binance CEO Richard Teng says it has zero tolerance for sanctions violations.

Binance Faces New Iran-Related Probe

The Manhattan U.S. Attorney’s Office is handling the investigation, with the Justice Department’s criminal division also involved. Prosecutors are examining whether Binance’s compliance teams knew about certain Iran-linked trading activity and whether the exchange should have stopped it.

The investigation follows a September 14 civil forfeiture complaint seeking more than $61 million in USDT tied to alleged Iranian oil proceeds. 

The DOJ said two Chinese companies, Blessed Trust and Hexa Whale, used Binance trading accounts to move funds from black-market Iranian oil sales.

Importantly, prosecutors did not file the forfeiture case against Binance, and they did not accuse the exchange of wrongdoing in that complaint. The new criminal probe is now examining Binance’s own compliance practices.

$1.5B Iran Crypto Network Puts Binance Under Scrutiny

The case has gained wider attention because prosecutors identified a network of crypto addresses that allegedly received and distributed more than $1.5 billion from illicit Iranian oil sales.

Federal investigators are probing whether Binance’s compliance teams were grossly negligent or “knowingly permitted” these sanctioned front companies to operate on their network

The timing also brings back Binance’s 2023 sanctions case. Binance pleaded guilty to U.S. sanctions and other violations after prosecutors found that its controls had allowed transactions involving sanctioned jurisdictions, including Iran. 

The company agreed to a $4.3 billion financial penalty, while founder Changpeng Zhao pleaded guilty separately.

Binance Pushes Back Against Allegations

Binance Co-CEO Richard Teng rejected claims that the exchange knowingly allowed sanctions violations.

We have zero tolerance for sanctions violations or illicit activity.”

Teng said Binance did not permit transactions with sanctioned individuals and would continue cooperating with law enforcement. He further added, 

We will never compromise on security or compliance. If you seek to use our industry to evade the law, we will find you, freeze you out, and hand you over to the authorities.