US Prosecutors Probe Binance Over Potential Iran Sanctions Violations, Bloomberg Reports

U.S. federal prosecutors are investigating whether Binance violated Iran sanctions by failing to stop certain trading activity, according to a Bloomberg Law report published September 22. The reported inquiry involves the Manhattan U.S. Attorney’s Office and the Justice Department’s Criminal Division, with prosecutors examining whether Binance knowingly permitted the trades.

Reuters reported on September 21 that it had corroborated the investigation. Binance told Reuters it has a zero-tolerance approach to sanctions violations, cooperates with law enforcement and works to shut down bad actors.

Reported DOJ inquiry

The reported scrutiny comes shortly after federal prosecutors in Manhattan brought a civil action seeking to forfeit cryptocurrency allegedly connected to Iranian oil sales. Bloomberg Law said the investigation is focused on potential sanctions breaches and on the question of what Binance knew about the relevant activity.

The reports do not establish whether prosecutors have alleged wrongdoing by Binance or brought charges against the exchange. Neither report cited an announced enforcement action tied to the reported inquiry.

$61 million Iranian oil proceeds case

On September 14, the U.S. Attorney’s Office for the Southern District of New York announced a civil forfeiture action targeting about $61 million in cryptocurrency. Prosecutors alleged that the assets represented proceeds from Iranian oil sales conducted through black-market channels associated with Iran’s military.

According to the Justice Department announcement, two Chinese companies used Binance trading accounts to launder the alleged proceeds. A civil forfeiture complaint seeks control of assets; it is distinct from a criminal charge against an exchange or another party.

Transaction records and fund tracing

Binance customer transaction records, including cryptocurrency addresses, execution times and transaction amounts, are described in the DOJ forfeiture complaint.

According to the filing, prosecutors used that exchange data to trace the allegedly illicit funds targeted in the action, creating a direct link between Binance account activity and the government’s tracing work.

The complaint does not say that this forfeiture action and the separately reported sanctions investigation are the same matter.

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