Bloomberg: U.S. Federal Prosecutors Examine Binance Sanctions Compliance

U.S. prosecutors are examining whether Binance knowingly allowed users to circumvent sanctions imposed on Iran, Bloomberg reported Tuesday, citing people familiar with the investigation.

The U.S. Attorney’s Office in Manhattan is leading the inquiry into the exchange’s sanctions-compliance practices. Investigators are looking into whether Binance failed to stop certain trading activity that could have violated U.S. sanctions, the sources said. They requested anonymity because the investigation is not public.

The Justice Department’s criminal division in Washington, D.C., is also assisting with the probe. According to one person familiar with the matter, prosecutors are trying to establish whether Binance permitted trading to continue while aware that it could breach U.S. sanctions laws.

A Binance spokesperson said the exchange has a zero-tolerance approach to sanctions violations.

“We maintain a zero-tolerance policy for sanctions violations,” the spokesperson said in an email. “We fully cooperate with law enforcement, and we remain committed to rooting out and shutting down bad actors.”

Neither the Justice Department nor the Manhattan U.S. Attorney’s Office immediately responded to CoinDesk’s requests for comment.

The investigation adds to Binance’s history of scrutiny from U.S. authorities. In 2023, the exchange pleaded guilty to banking compliance violations and agreed to pay $4.3 billion in fines.

Binance has since emphasized its compliance efforts and cooperation with regulators and law enforcement. In a February blog post, the company said its compliance operations included more than 1,500 employees, representing roughly 25% of its global workforce.

The exchange became involved in another dispute with U.S. media in March when it filed a defamation lawsuit against Dow Jones, publisher of The Wall Street Journal. The legal action followed a report that the Justice Department was investigating whether Iran had used Binance to move funds in violation of U.S. sanctions.

Binance co-CEO Richard Teng rejected the report and accused the Wall Street Journal of “inaccurate reporting about our compliance program.”

The New York Times reported in April that Binance had made it harder for law enforcement agencies in several countries to obtain user information. The newspaper said the changes could hinder efforts to identify scammers and combat money laundering.

Binance has repeatedly maintained that it has never permitted transactions involving sanctioned individuals and has said it will continue cooperating with government authorities.

Separately, Senator Richard Blumenthal, a Democrat on the Senate Homeland Security Committee, launched a probe in February into allegations that Binance was involved in about $1.7 billion worth of sanctions violations. Binance disputed the claims, saying it found no evidence to support the allegations.