US justice department investigates Binance over Iran sanctions

The US Department of Justice is investigating whether Binance, the world’s largest crypto exchange, violated US sanctions against Iran. According to insiders who spoke to Bloomberg, the investigation centres on whether Binance knowingly allowed certain transactions to take place that should have been blocked under the sanctions. Binance itself says it maintains a strict policy against sanctions violations and promises full cooperation.

In brief:

• The Manhattan District Attorney’s Office is investigating whether Binance violated US sanctions against Iran.
• The investigation focuses on Binance’s compliance controls and whether the company was aware of the transactions.
• Binance already paid $4.3 billion in 2023 following a settlement over money laundering and earlier sanctions violations.

Manhattan District Attorney’s Office leads investigation

The investigation is being handled by the Manhattan District Attorney’s Office and focuses on whether Binance’s internal compliance controls were inadequate and whether the company knew that certain transactions were taking place that violated US sanctions against Iran.

WuBlockchain was first to report the news on X, following Bloomberg reporting based on people familiar with the matter.

Binance has had a turbulent legal history. In 2023, the company reached a $4.3 billion settlement with US authorities after pleading guilty to money laundering, operating an unlicensed money transmitting business and earlier sanctions violations. Founder and former CEO Changpeng Zhao was sentenced to four months in prison in connection with that. The fact that Binance is now once again in the sights of prosecutors raises questions about how far compliance oversight really extended at the time and afterwards. Binance’s website had previously reported that Ethereum withdrawals at Binance reached their highest level in three years.

Binance promises full cooperation

In response to the reports, Binance says it operates a “zero-tolerance policy” when it comes to sanctions violations. The company says it will cooperate fully with the authorities and is committed to detecting and stopping malicious actors.

It is not yet clear how far the investigation has progressed, how many transactions are involved or when the activities in question are said to have taken place. Whether the investigation will lead to new charges or a further settlement is currently unknown. For Binance, which has tried to rebuild in recent years following the 2023 settlement, the new legal investigation is in any case a major setback.