Federal prosecutors are probing Binance for potential violations of U.S. sanctions against Iran, amid claims of significant illicit transactions.
US Authorities Investigate Binance
Federal prosecutors are currently investigating Binance for potentially allowing trades that may have violated U.S. sanctions against Iran. The inquiry is being conducted by the Manhattan U.S. attorney's office, in collaboration with the Justice Department's criminal division.
While specific details about the trades under scrutiny remain undisclosed, it is important to note that investigations by the Justice Department can often conclude without any charges being filed. Both the Justice Department and the Manhattan U.S. attorney's office have refrained from commenting on the investigation.
In response to the allegations, Binance reiterated its commitment to a strict zero-tolerance policy regarding sanctions violations and emphasized its cooperation with law enforcement.
This investigation follows a troubling history for Binance, which nearly three years ago acknowledged shortcomings in complying with U.S. banking and sanctions regulations. This led to a substantial settlement of $4.3 billion and the appointment of corporate monitors. Co-founder Changpeng Zhao also faced legal consequences, serving four months in prison before being pardoned by former President Donald Trump last year.
Earlier this year, internal investigations at Binance purportedly revealed over $1 billion in transactions linked to Iranian entities. This prompted Senator Richard Blumenthal to initiate a preliminary investigation into two specific companies, Hexa Whale and Blessed Trust, connected to these transactions.
Binance has contested these findings, claiming that only a fraction of funds, approximately $126.1 million, reached wallets associated with Iran, and that only $24.1 million could be related to the Islamic Revolutionary Guard Corps (IRGC). The company also stated that no employees were dismissed for raising compliance concerns and has filed a lawsuit against the media for its reporting on the issue.
Recently, Manhattan prosecutors have attempted to seize $61 million they allege was laundered through Binance from Iranian black-market oil sales. Although the two companies mentioned have been implicated, Binance itself has not been directly accused of wrongdoing in this instance.
In a broader context, the Office of Foreign Assets Control (OFAC) has recently expanded its authority to impose sanctions on foreign individuals involved in Iran's digital asset sector, as part of its Operation Economic Outcast initiative.
