Federal prosecutors have opened a fresh criminal investigation into Binance, examining whether the world’s largest crypto exchange knowingly allowed trading that violated US sanctions on Iran. The probe, first reported by Bloomberg on September 22, is run by the US Attorney’s Office for the Southern District of New York together with the Justice Department’s criminal division in Washington. No new charges have been filed, and the investigation does not establish that Binance broke sanctions again. But it lands on an exchange still working through the fallout of the largest crypto enforcement settlement in US history, and it comes weeks after prosecutors moved to seize millions of dollars in crypto they say was tied to Iranian oil sales laundered through Binance accounts.
What prosecutors are looking at
According to Bloomberg, which cited people familiar with the matter, investigators are trying to determine whether Binance knowingly permitted transactions involving Iranian users after its 2023 settlement, and whether the compliance systems it promised to build actually worked. The specific transactions under review have not been made public. Reuters, drawing on the same reporting, framed the question more narrowly: whether the exchange adequately prevented Iranian users from trading on its platform.
Both offices involved declined to comment. Binance said in a statement that it maintains a zero-tolerance approach to sanctions violations and is cooperating with authorities. The company stressed that users residing or located in Iran are prohibited from using the platform.
The 2023 settlement that set the stage
The new probe has to be read against what Binance already admitted to. In November 2023, the exchange and its founder Changpeng Zhao pleaded guilty to federal charges including violations of the Bank Secrecy Act and sanctions-related failures. Binance agreed to pay more than $4.3 billion in penalties and accept a three-year independent compliance monitor, one of the heaviest resolutions ever imposed on a crypto company. Zhao stepped down as CEO and later served nearly four months in prison. President Donald Trump pardoned him in October 2025.
As part of that resolution, the Justice Department said Binance had failed to put controls in place that would stop US customers from transacting with users in Iran and other sanctioned jurisdictions. Prosecutors calculated that more than $898 million in trades flowed between US users and users ordinarily resident in Iran between January 2018 and May 2022. That admission matters now because the new investigation is not a reopening of the old case. It is a separate inquiry into what happened after the exchange promised to fix the problem.
Iran-linked flows and recent forfeitures
The probe also follows a series of smaller actions that sketch out the enforcement picture. Earlier in September, federal prosecutors in Manhattan sought the forfeiture of about $61 million in crypto allegedly linked to Iranian oil sales that moved through Binance accounts. In an earlier case, the Justice Department said Binance customers had used the exchange to funnel money from Iranian oil exports.
Binance, for its part, has laid out its own enforcement record in response to the reports. The company said law enforcement contacted it in April 2025 about transactions involving Hexa Whale and other addresses designated for terrorism financing. It says it provided KYC and transaction records in June 2025, delisted Hexa Whale from Binance.com in August 2025, and offboarded Blessed Trust in January 2026 after source-of-funds checks. Binance also says its direct exposure to four major Iranian exchanges fell 97.3 percent over two years, from $4.19 million to about $110,000.
| Date | Event |
|---|---|
| Nov 2023 | Binance and CZ plead guilty; $4.3 billion settlement, compliance monitor imposed |
| 2018-2022 | $898 million in trades between US and Iran-resident users, per DOJ |
| Oct 2025 | Trump pardons Changpeng Zhao |
| Apr 2025 | Law enforcement contacts Binance over Hexa Whale addresses |
| Aug 2025 | Hexa Whale delisted from Binance.com |
| Jan 2026 | Blessed Trust offboarded after source-of-funds checks |
| Sep 2026 | $61 million forfeiture action over alleged Iranian oil funds |
| Sep 22, 2026 | Bloomberg reports new DOJ criminal probe |
“We have a zero-tolerance approach to sanctions violations and are cooperating with authorities,” Binance said in response to the report.
Why the timing matters
The investigation lands at an awkward moment for Washington and for the industry. On the same day, the House Financial Services Committee advanced a bill to write the Strategic Bitcoin Reserve executive order into federal law, and Binance itself announced a $100 million investment in Circle alongside a five-year USDC partnership. The exchange has been positioning itself as a partner to US-regulated stablecoin infrastructure even as prosecutors revisit its sanctions record.
It also lands amid a broader tightening of US pressure on Iran. The United States has intensified sanctions enforcement against Iranian entities and the proxies alleged to fund them, and crypto rails have been a recurring target. A Wall Street Journal report from March 2026 that the Justice Department was probing Iran’s use of Binance to evade sanctions now reads as groundwork for the current criminal inquiry.
How Iran has used crypto before
This is not the first time Iranian sanctions evasion through crypto has reached federal court. In November 2022, the Justice Department charged two Iranian nationals for a cybercampaign against the Aluminum Company of America and used the case to announce the seizure of roughly $31 million in crypto tied to an Iranian-backed ransomware group, along with a sanctions designation against an Iranian pro-government hacking network. Prosecutors have repeatedly described Iranian actors using exchanges, mixers and front companies to move proceeds out of restricted banking channels. The current Binance probe fits that pattern: the question is not whether Iran uses crypto, but whether the largest exchange did enough to stop it.
The compliance industry has been watching the details closely. BitGo Research published an analysis of the case earlier this month, noting that the 2023 resolution required Binance to build transaction monitoring that could distinguish sanctioned-jurisdiction users from ordinary VPN users, a harder problem than it sounds. Iranian users routinely route access through neighboring countries, and IP-based geofencing alone has never been sufficient. That gap between what a monitor can verify and what an exchange can prove is likely to sit at the center of any charging decision.
The political crosscurrents
There is also a political layer to the case that the 2023 settlement did not have. Zhao’s pardon in October 2025 was widely read as a sign that the administration wanted friendlier relations with the crypto industry. The House committee vote on the Strategic Bitcoin Reserve bill the same day the probe was reported shows Congress still moving in the industry’s direction. Yet the Justice Department’s criminal division operates with some independence on sanctions matters, and sanctions enforcement against Iran has been one of the few areas of consistent bipartisan pressure across administrations.
For Binance, the practical question is whether the probe ends in another deferred resolution, a trial, or a quiet closure. A second resolution would likely include terms the 2023 deal did not: possibly an independent compliance consultant with broader authority, or restrictions on specific product lines. The exchange’s $100 million Circle investment and its USDC partnership suggest Binance is betting its future on being inside the US regulatory perimeter. A sanctions case is the kind of thing that bet cannot afford.
What it means for the market
Binance still handles roughly 38.7 percent of volume among the top ten centralized exchanges, according to CoinGecko, so any enforcement outcome would ripple through liquidity across the market. If institutions pull back from Binance while the probe runs, trading activity could migrate to rivals such as Coinbase and OKX, changing fee dynamics and order book depth.
There are reasons not to overreact. The probe has produced no charges. Binance’s compliance program has been operating under a monitor, and the company’s own numbers, whatever their limits, suggest a sharp drop in measurable Iranian exposure. But the standard the 2023 settlement set was not a one-time fine. It was a promise of functioning controls. If prosecutors conclude those controls failed knowingly, the penalties and the structural remedies could dwarf the last round. If they conclude the exchange did its best in a hard environment, the case may close quietly. Either way, the next few months of document requests and negotiations will say a lot about how the second Trump-era Justice Department treats crypto compliance failures.