US Justice Department digs into Iran’s sanctions evasion via Binance
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A probe has been initiated by the US Justice Department into Iran’s use of Binance, the world’s largest crypto platform, to circumvent US sanctions and provide financial backing to terrorist organisations with ties to the IRGC, according to The Wall Street Journal.
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The US DOJ’s examination stems from company documents and accounts provided by individuals familiar with the matter.
Authorities have contacted people with direct knowledge of the Iranian-linked transactions to request interviews and collect evidence, as per the WSJ report.
A monitor appointed by the US Treasury Department has reportedly asked Binance for details on the Iranian transactions, including information about a business partner responsible for a large share of the flows.
At this stage, it remains uncertain whether the investigation targets Binance for any potential misconduct or if it is confined to activity by customers on the platform.
A spokesperson for the company told the WSJ that Binance “categorically did not directly transact with any sanctioned entities”.
This development brings the company back to the centre of US regulatory attention, just months after its founder received a presidential pardon, highlighting persistent challenges in enforcing sanctions within the rapidly evolving crypto and fintech sectors.
Binance founder Changpeng Zhao, widely known as CZ, was pardoned by President Trump back in October.
The investigation reopens scrutiny of the exchange, which pleaded guilty in 2023 to breaching US sanctions and banking laws. That case resulted in a record $4.3bn (€3.7bn) penalty and a requirement for ongoing US oversight.
Under the terms of the 2023 agreement, Binance must actively screen clients for terrorism financing and sanctions breaches, as well as report suspicious activity promptly to authorities.
US congressional inquiry adds pressure
The developments have also drawn attention from Capitol Hill.
US Senator Richard Blumenthal, a senior Democrat on the Senate Homeland Security Committee, opened a formal inquiry last month into Binance’s handling of the Iranian transactions.
Citing the scale of the unreported flows, approaching nearly $2bn (€1.7bn) to sanctioned entities, and the suspension of internal investigators, Blumenthal questioned whether the exchange had met its obligations under US sanctions and banking laws.
He requested detailed records from Binance, which responded by describing media coverage as inaccurate and highlighting its “best-in-class compliance programme”.
The senator later described that reply as evasive and insufficient to address his concerns.
The timing of the US DOJ’s probe coincides with heightened efforts to disrupt financing networks linked to Iran’s IRGC.
Ahead of joint military actions with Israel against Iran, Washington stepped up measures to cut off revenue streams, particularly those involving crypto assets used to repatriate proceeds from oil sales to China.
In January, the US Treasury Department sanctioned two smaller crypto exchanges for moving large sums to digital wallets connected to the IRGC.