Binance Faces US Probe Over Possible Iran Sanctions Violations

US federal prosecutors are investigating whether Binance knowingly allowed trading activity that violated US sanctions relating to Iran, adding a new layer of regulatory scrutiny to the cryptocurrency exchange. The reported investigation is being led by the US Attorney’s Office for the Southern District of New York, with the Justice Department’s Criminal Division in Washington also involved.

The inquiry concerns whether transactions involving Iran or Iranian-linked parties were permitted to take place through Binance despite US sanctions restrictions. The specific transactions under examination, their value, the parties involved and the period covered by the investigation have not been publicly disclosed. No new criminal charge or regulatory penalty against Binance has been announced in connection with the reported investigation.

Binance has stated that it maintains a zero-tolerance policy for sanctions violations and cooperates with law-enforcement authorities. The company has also said that it remains committed to identifying and removing bad actors from its platform. The US Department of Justice has not publicly commented on the reported investigation.

The investigation follows a separate civil forfeiture action filed by federal prosecutors in New York on 14 September 2026 seeking approximately $61 million in cryptocurrency allegedly connected to the sale of Iranian crude oil and petroleum products through illicit channels.

The forfeiture complaint names cryptocurrency assets rather than Binance as the property subject to the action. Prosecutors allege that two Chinese companies, Blessed Trust and Hexa Whale, used cryptocurrency accounts on Binance to process more than $1.5 billion in proceeds associated with black-market Iranian oil sales. The complaint alleges that funds ultimately moved to the Iranian government, its agents or proxies, including the Islamic Revolutionary Guard Corps.

The court filing describes Binance's role in the transactions through its customer and transaction records. It states that Binance collects identifying information as part of its Know Your Customer procedures and maintains records of transactions conducted through customer accounts, including cryptocurrency addresses, transaction dates and times, and the amount and type of cryptocurrency involved.

The Iranian Transactions and Sanctions Regulations administered by the US Treasury's Office of Foreign Assets Control restrict certain transactions involving Iran and the Iranian government. The restrictions derive from US sanctions authorities established through executive orders and implemented under the International Emergency Economic Powers Act.

The current investigation is particularly relevant to Binance because the exchange previously faced significant US sanctions-related enforcement action. In November 2023, OFAC announced a settlement with Binance concerning apparent violations involving transactions with users in sanctioned jurisdictions and blocked persons. The settlement covered activity between approximately August 2017 and October 2022.

OFAC stated that Binance had processed more than 1.66 million virtual currency transactions, with an aggregate value of approximately $706 million, that violated sanctions regulations. The jurisdictions identified in the settlement included Iran, Syria, North Korea, Cuba and regions subject to US sanctions relating to Ukraine and Russia.

OFAC's 2023 findings also concerned Binance's controls for identifying the location of customers and preventing users in sanctioned jurisdictions from trading with other users through the platform. The agency referred to information including Know Your Customer documentation, telephone numbers and IP addresses in identifying users located in sanctioned jurisdictions.

The OFAC settlement resulted in a payment of approximately $968.6 million, while Binance agreed to maintain a sanctions compliance monitor for five years. The settlement also contained compliance commitments covering the company's sanctions controls. OFAC stated that a material breach of those commitments could result in additional enforcement action.

The 2023 enforcement action formed part of a broader US resolution involving Binance. The exchange agreed to a total US settlement of approximately $4.3 billion concerning sanctions, anti-money laundering and money-transmission violations. Binance founder and then-chief executive Changpeng Zhao stepped down and pleaded guilty to a US charge relating to failure to maintain an effective anti-money laundering programme.

The new investigation therefore places particular attention on the effectiveness of Binance's sanctions compliance framework following the earlier enforcement action and the implementation of its subsequent remediation measures. However, the existence of the earlier settlement does not establish that Binance committed a new violation in the conduct currently under investigation.

Sanctions compliance for cryptocurrency exchanges involves multiple layers of controls. These can include customer identification and verification, geographic restrictions, sanctions-list screening, IP and device monitoring, blockchain analytics, wallet screening, transaction monitoring and controls designed to identify attempts to circumvent geographic restrictions.

The US government's recent forfeiture complaint illustrates the importance of transaction-level information in investigations involving digital assets. Cryptocurrency transactions can be traced through blockchain records, while exchanges maintain additional internal information linking wallet addresses to customer accounts and transaction activity. The combination of those records can allow investigators to reconstruct the movement of digital assets and identify relationships between accounts and counterparties.

Iran-related cryptocurrency activity has also remained an area of US enforcement attention. The reported Binance investigation follows other actions directed at cryptocurrency businesses and networks that US authorities allege have facilitated Iranian financial activity or provided channels for moving digital assets in connection with sanctioned parties.

The central issue in the reported Binance investigation is whether prohibited activity was allowed to occur and, more specifically, whether the exchange knowingly permitted transactions that should have been prevented under applicable US sanctions. Establishing such conduct would require evidence concerning the transactions, the parties involved, the applicable sanctions restrictions, Binance's knowledge and the operation of its compliance controls at the relevant time.

The current public information does not establish that Binance itself knowingly violated US sanctions. The investigation remains ongoing, and the specific conduct being examined has not been publicly identified in sufficient detail to determine whether prosecutors will ultimately bring charges or take other enforcement action.

The reported investigation therefore remains separate from the 2026 civil forfeiture proceedings involving approximately $61 million in cryptocurrency. While both matters involve alleged Iranian oil-related financial activity and Binance accounts, the forfeiture action concerns identified cryptocurrency assets, whereas the reported criminal investigation focuses on whether Binance knowingly permitted sanctions-violating trading activity.

Further developments are expected to depend on the outcome of the federal investigation and any subsequent court filings, enforcement announcements or other official disclosures.

By fLEXI tEAM