Key Highlights
- U.S. federal prosecutors in Manhattan are investigating whether Binance knowingly allowed trading that violated Iran sanctions, nearly three years after the exchange’s $4.3 billion settlement with the Justice Department.
- A separate civil forfeiture complaint filed September 14 seeks approximately $61 million in USDT held in 10 cryptocurrency addresses, alleging the funds represent proceeds from Iranian crude oil sales intended to finance the Islamic Revolutionary Guard Corps.
- Binance maintains it offboarded the implicated firms Hexa Whale and Blessed Trust in 2025 and 2026 respectively, and says its internal review found approximately $126.1 million eventually reached Iran-linked wallets after multiple blockchain hops.
Manhattan Prosecutors Open New Iran Sanctions Inquiry Into Binance
U.S. federal prosecutors have launched a fresh investigation into whether Binance, the world’s largest cryptocurrency exchange, knowingly permitted trading activity that violated U.S. sanctions on Iran. According to a September 22 Bloomberg report, the Manhattan U.S. Attorney’s Office is leading the inquiry with participation from the Justice Department’s Criminal Division in Washington. The investigation focuses on Binance’s compliance controls and whether the exchange was aware of the specific transactions under review. Reuters noted it had not independently verified Bloomberg’s account.
Binance responded to the reporting by reiterating its compliance posture. The exchange said, “We fully cooperate with law enforcement, and we remain committed to rooting out and shutting down bad actors.” The Justice Department declined to comment to Reuters, while the Manhattan U.S. Attorney’s Office was not immediately available for comment outside normal business hours.
Civil Forfeiture Complaint Details $61 Million in Alleged Iranian Oil Proceeds
Running parallel to the reported criminal inquiry, a verified civil forfeiture complaint filed September 14 in the Southern District of New York provides public documentation of Iran-linked funds moving through Binance accounts. The case, United States v. All USD Tether Held in the Following Cryptocurrency Addresses, No. 1:26-cv-08010, seeks all USDT held in 10 cryptocurrency addresses operating on the TRON network, valued at approximately $61 million.
Prosecutors allege the targeted cryptocurrency represents proceeds from black-market Iranian crude oil and petroleum sales intended to finance Iranian government and military bodies, including the Islamic Revolutionary Guard Corps (IRGC). The complaint identifies two Chinese companies, Blessed Trust and Hexa Whale, as having used Binance trading accounts while handling proceeds connected with Iranian oil sales. According to the filing, a network of cryptocurrency actors laundered more than $1.5 billion in illicit oil proceeds, while Blessed Trust and Hexa Whale used the U.S. financial system to send or receive tens of millions of dollars.
The forfeiture complaint does not accuse Binance itself of wrongdoing in that proceeding. The Justice Department states that a civil forfeiture complaint contains allegations that remain unproven until a court enters judgment for the government. Court records indicate Tether would burn the tokens covered by a seizure warrant and issue replacement tokens of equal value for transfer into U.S. government custody.
Binance Details Offboarding Timeline for Implicated Firms
Binance has provided its own timeline regarding the two firms named in the forfeiture complaint. In a March 6 response to a Senate inquiry, the exchange said law enforcement contacted it in April 2025 about transactions between Binance wallets and outside addresses with possible terrorism-financing connections. The company said it supplied know-your-customer and transaction records connected with Hexa Whale in June 2025 and continued reviewing the account afterward.
Binance said it removed Hexa Whale from Binance.com on August 13, 2025. A separate set of law-enforcement requests concerning transactions involving other outside wallets arrived during summer 2025, according to the exchange. Investigators then performed a source-of-funds review and offboarded Blessed Trust in January 2026.
The exchange maintains that, to its knowledge, no Binance account transacted directly with an Iran-based entity. In another March statement, Binance said its investigation found approximately $126.1 million eventually reached wallets linked to Iran after multiple blockchain hops, with as much as $24.1 million reaching IRGC-related wallets. The figures are Binance’s account of its internal review and have not been presented by the company as findings of a court.
Congressional Scrutiny Preceded Current Investigation
Scrutiny of Binance’s Iran-related controls surfaced months before the Bloomberg report. In March, Senators Elizabeth Warren, Chris Van Hollen, and Ruben Gallego planned congressional oversight of a reported Justice Department investigation involving Iran-linked transactions. At the time, the inquiry was described as examining whether networks connected to Iran used Binance to evade U.S. sanctions.
Binance disputed claims made in several February reports. In its March congressional response, the company described parts of the reporting as “demonstrably false, unsupported by credible evidence, and defamatory in several material respects.” Binance said its know-your-customer rules prohibit users residing or located in Iran from accessing Binance.com.
The exchange also defended its compliance staffing and monitoring data. Binance says more than 1,500 people work in compliance-related functions, representing roughly 25% of its global workforce. It 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. Binance said claims that it fired compliance employees for escalating concerns were false, acknowledging that one employee was dismissed after an internal investigation over what the company described as an unauthorized disclosure of user information, while other compliance workers left voluntarily.
Investigation Follows Landmark 2023 Criminal Settlement
The current scrutiny follows Binance’s November 2023 criminal resolution with U.S. authorities. 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, the Justice Department said Binance knowingly failed to install controls that would stop U.S. customers from trading with users in sanctioned jurisdictions. Federal prosecutors said Binance caused more than $898 million in trades between U.S. users and users ordinarily resident in Iran from January 2018 through May 2022.
The settlement required Binance to retain an independent compliance monitor for three years and improve its anti-money-laundering and sanctions systems. Separate coordinated resolutions involved FinCEN, the Treasury Department’s Office of Foreign Assets Control, and the Commodity Futures Trading Commission. Treasury-related oversight gave authorities access to Binance books, records, and systems under separate monitoring obligations, while Iran-linked transaction reports prompted renewed questions about compliance.
Why This Matters
The reported investigation represents a critical test of whether Binance’s post-settlement compliance reforms are functioning as required under its 2023 plea agreement. The exchange’s admission to processing nearly $898 million in Iran-linked trades between 2018 and 2022 established a pattern of sanctions violations that resulted in one of the largest corporate penalties in U.S. history. The new Manhattan inquiry, combined with the civil forfeiture action targeting $61 million in alleged Iranian oil proceeds, suggests prosecutors are examining whether the exchange’s enhanced controls — including the independent monitor and expanded compliance staff — are effectively preventing sanctioned entities from accessing the platform. For the broader cryptocurrency industry, the case underscores the persistent challenge of enforcing sanctions compliance on decentralized networks where transactions can be obscured through multiple blockchain hops and intermediary wallets.
Frequently Asked Questions
What specific sanctions is Binance accused of violating?
The investigation centers on U.S. sanctions on Iran, specifically whether Binance knowingly allowed trading that should have been stopped under the International Emergency Economic Powers Act and related sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control (OFAC).
Does the civil forfeiture complaint charge Binance with a crime?
No. The September 14 forfeiture complaint targets the cryptocurrency held in 10 specific wallet addresses, not Binance itself. The Justice Department states the allegations in the complaint remain unproven until a court enters judgment for the government.
What was the outcome of Binance’s 2023 settlement with U.S. authorities?
Binance pleaded guilty to Bank Secrecy Act violations, operating an unregistered money-transmitting business, and violating the International Emergency Economic Powers Act. The exchange agreed to a $4.316 billion criminal penalty, retention of an independent compliance monitor for three years, and enhancements to its anti-money-laundering and sanctions compliance systems.
