DOJ Opens Criminal Probe into Binance Over Iran Sanctions

Federal Prosecutors Review Exchange Compliance

The U.S. Department of Justice (DOJ) has officially initiated a probe into whether Binance knowingly violated Iran sanctions. Federal prosecutors in Manhattan, New York, are currently reviewing whether the exchange was aware of illicit capital flows originating from Iran. The DOJ’s criminal division is involved in the investigation, marking a significant escalation in regulatory scrutiny of the digital asset exchange.

The probe follows months of speculation regarding the exchange’s internal compliance mechanisms. According to reports, Binance allegedly dismissed internal investigators who had initially identified the Iranian illicit flows on the platform. In February, media reports suggested these dismissals were directly linked to the findings of capital flows from sanctioned Iranian entities. The two Chinese accounts at the center of those reports were named Blessed Trust and Hexa Whale.

$61 Million Forfeiture and Treasury Actions

Last week, the U.S. government sought a forfeiture of $61 million from Binance. The DOJ stated that these funds were tied to Iranian black market oil sales. According to the U.S. government, the money was being laundered by two Chinese companies, Blessed Trust and Hexa Whale, on behalf of the Iranian regime.

This specific forfeiture action is part of a broader enforcement effort by the U.S. Treasury. Since the Israel-Iran war began earlier this year, the U.S. Treasury has frozen over $1 billion in crypto funds tied to the Iranian regime. A statement from the U.S. government emphasized that by cutting off funds raised by the black-market sale of crude oil, the Iranian military and terrorist groups are weakened. The FBI stated it will not relent in its resolve to drain funds from dangerous foreign actors.

Binance Denies Wrongdoing

Binance CEO Richard Teng has clarified that the exchange has committed no wrongdoing. Teng stated that the DOJ has not filed a formal case against Binance at this time. He maintained that the company does not tolerate sanctioned individuals on its platform and would swiftly hand over any culprits to the authorities.

Teng’s comments come as Binance actively ramps up its compliance efforts and expands its compliance team. Despite ongoing regulatory hiccups across the U.S. and EU, the exchange continues to lead in net capital inflows, with recent figures showing $1 billion in net capital inflows.

EU Regulatory Friction

The investigation in the U.S. coincides with challenges in the European Union. ECB President Christine Lagarde reportedly intervened to block Binance from receiving MiCA license approval. This move highlights the increasing friction between major digital asset platforms and central banking authorities in Europe, where the Markets in Crypto-Assets (MiCA) regulation is being implemented.

The DOJ probe represents a critical test for Binance’s global compliance infrastructure. As the exchange navigates legal scrutiny in Manhattan and regulatory hurdles in Brussels, the outcome of the federal investigation will likely influence how other digital asset platforms approach sanctions compliance in the future.