U.S. federal prosecutors are investigating whether Binance violated sanctions on Iran by not stopping certain trading on its platform, Bloomberg reported on Monday, citing people familiar with the matter. The Manhattan U.S. attorney's office is handling the inquiry, the Justice Department's criminal division in Washington is also involved, and authorities are scrutinizing whether the exchange knowingly allowed the trading.
The transactions under examination were not clear, and Justice Department investigations can close without charges being filed. Spokespeople for the department and the Manhattan U.S. attorney's office declined to comment.
"We maintain a zero-tolerance policy for sanctions violations," Binance said in a statement, adding that it cooperates with law enforcement.
The exchange pleaded guilty almost three years ago to failing to comply with U.S. banking and sanctions law, paid $4.3 billion and took on two corporate monitors. Co-founder Changpeng Zhao stepped down as chief executive, served four months in prison and was pardoned by President Donald Trump last year.
Fortune reported on February 13 that internal investigators had found more than $1 billion moving through the platform to Iran-linked entities and were then dismissed. The Wall Street Journal carried the firings on February 23, and the New York Times put the sum sent to Iranian entities at $1.7 billion the same day. Senator Richard Blumenthal opened a preliminary inquiry the following day, demanding records on two entities, Hexa Whale and Blessed Trust.
Binance rejected that account in a March 10 post, saying the money neither originated nor terminated on its platform and that at most $126.1 million reached wallets linked to Iran after multiple hops, of which at most $24.1 million reached IRGC-related wallets. The Iranian links surfaced only once it had begun investigating, it said, and no employee was dismissed for escalating compliance concerns. It separately told Blumenthal its compliance process had been effective, and has sued the Journal over the reporting.
Both entities Blumenthal asked about resurfaced last week, when Manhattan prosecutors sought forfeiture of $61 million they say came from Iranian black-market oil sales and was laundered through Binance. Two Hong Kong-registered companies misrepresented their business activities, prosecutors said . Binance was not accused of wrongdoing in that action.
OFAC gave itself the power in August to designate any foreign person operating in Iran's digital asset sector, wherever they are based, one of five sectoral determinations issued under a campaign Treasury calls Operation Economic Outcast. Washington sanctioned firms and individuals it says finance Hezbollah and other Iranian proxies on September 10.