U.S. federal prosecutors are investigating whether Binance, the world's largest cryptocurrency exchange, violated U.S. sanctions on Iran by allowing certain trading activity to continue on its platform, according to people familiar with the matter.

The investigation is being led by the U.S. Attorney's Office for the Southern District of New York, with the Justice Department's criminal division in Washington also involved. The Manhattan federal prosecutor's office has historically been one of the most active U.S. venues for financial-crime enforcement, including matters involving digital-asset businesses. Prosecutors are examining whether the exchange knowingly permitted transactions that breached Iran-related sanctions to take place on its platform.

Binance said it maintains a “zero-tolerance” policy toward sanctions violations and that it cooperates fully with law enforcement.

The probe comes just days after U.S. prosecutors sought the forfeiture of approximately $61 million in cryptocurrency allegedly linked to black-market Iranian oil sales. Forfeiture actions of this kind allow the government to seek assets it alleges are tied to unlawful conduct without charging the platform that processed the underlying transactions. In that forfeiture action, the Justice Department said two Chinese companies used Binance trading accounts to help move proceeds from the oil sales, with more than $1.5 billion in cryptocurrency allegedly flowing through related wallets. The forfeiture complaint, however, did not Binance itself of any wrongdoing.

U.S. sanctions on Iran broadly prohibit individuals and companies under American jurisdiction from conducting transactions with Iranian counterparties. For exchanges serving U.S. customers, that generally means obligations to screen users and block transactions connected to sanctioned jurisdictions, and the current probe centers on whether Binance knowingly allowed transactions that breached those restrictions.

The latest scrutiny adds to Binance's regulatory history in the United States. In 2023, the exchange agreed to pay about $4.3 billion to resolve U.S. criminal investigations into sanctions violations, anti-money-laundering failures and other compliance breaches. The resolution ranked among the largest penalties ever imposed on a cryptocurrency company. As part of that settlement, Binance admitted to the misconduct, and its founding chief executive stepped down. Founder Changpeng Zhao also pleaded guilty to a U.S. anti-money-laundering violation and was later sentenced to four months in prison. The new probe underscores that sanctions compliance remains one of the most significant legal exposures for global exchanges serving U.S. users, even for firms that have already resolved major American enforcement actions.

The current investigation does not establish that Binance violated Iran sanctions, and it remains unclear whether prosecutors will ultimately bring charges. Federal investigations of this kind can conclude without any enforcement action, and the clearest signals of where the matter is heading will be future court filings in the Southern District of New York and any public disclosures from Binance about its cooperation.

Source: BitcoinKE