Federal prosecutors are investigating whether Binance Holdings Ltd. failed to stop certain trading on its platform that may have violated US sanctions on Iran, according to people familiar with the matter.
The investigation, led by the Manhattan US attorney's office and the DOJ Criminal Division, examines whether the world's largest crypto exchange by volume took adequate steps to prevent transactions that should have been blocked under Iran sanctions law. Binance has faced multiple regulatory probes since 2023 over sanctions enforcement, money laundering controls, and unlicensed money transmission.
Binance declined to comment on the investigation. The exchange has historically operated with minimal compliance infrastructure in several jurisdictions, a posture that shifted only after regulators in multiple countries threatened enforcement action. In 2023, Binance agreed to pay 4.3 billion dollars to settle civil and criminal charges brought by US authorities, including failure to maintain adequate anti-money-laundering systems. That settlement did not resolve the company's sanctions compliance record.
Iran sanctions enforcement has intensified across the financial system in recent years. The Treasury Department's Office of Foreign Assets Control maintains a list of Iranian entities and individuals subject to asset freezes and transaction prohibitions. Crypto exchanges that process transactions involving sanctioned parties face civil penalties, criminal charges against executives, and license revocation. Several smaller crypto platforms have shut down operations rather than invest in compliance infrastructure sufficient to screen Iran transactions.
Binance's scale creates exposure. The exchange processed more than 1 trillion dollars in trading volume during 2024, according to the company's disclosures. Even a small percentage of transactions touching Iran-linked wallets or accounts could result in significant sanction violations if the company failed to implement screening controls.
The investigation is the third major enforcement action against Binance in less than four years. In 2023, Binance agreed to the 4.3 billion dollar settlement without admitting wrongdoing. Separately, the company resolved allegations with the Securities and Exchange Commission over unregistered securities trading on its platform. Binance's chief executive officer Changpeng Zhao, who stepped down in 2023, pleaded guilty to money laundering violations in April 2024 and was sentenced to four months in federal prison.
Sanctions probes move slowly through federal courts; the average timeline from investigation notice to resolution runs 18 to 36 months, according to lawyers familiar with OFAC cases. The scope of this investigation, whether it targets corporate negligence or individual executive conduct, will determine whether Binance faces additional fines, structural restrictions, or criminal charges.
