The U.S. Department of Justice is conducting a criminal investigation into whether Binance Holdings Ltd. violated sanctions on Iran, Bloomberg reported on September 22, 2026. The probe, run jointly by the Manhattan U.S. Attorney's Office and the DOJ's criminal division in Washington, follows a Se...
"We have zero tolerance for sanctions violations or illicit activity, and we did not permit any transactions with sanctioned individuals." — Richard Teng, CEO, Binance
The U.S. Department of Justice is conducting a criminal investigation into whether Binance Holdings Ltd. violated sanctions on Iran, Bloomberg reported on September 22, 2026. The probe, run jointly by the Manhattan U.S. Attorney's Office and the DOJ's criminal division in Washington, follows a September 14 civil forfeiture action targeting $61 million in cryptocurrency tied to black-market Iranian oil sales. Two Chinese companies, Blessed Trust and Hexa Whale, allegedly used Binance trading accounts to launder proceeds from $1.5 billion in sanctioned crude oil transactions and route funds to Iran's Islamic Revolutionary Guard Corps (IRGC).
The investigation arrives less than three years after Binance's November 2023 guilty plea and $4.3 billion settlement over prior sanctions and anti-money-laundering failures — the largest crypto enforcement action in U.S. history. It also follows a February 2026 Senate probe led by Sen. Richard Blumenthal (D-CT), who alleged the exchange facilitated $1.7 billion in flows to Iran-linked entities between 2024 and 2025. The new DOJ inquiry puts Binance's post-settlement compliance regime under direct criminal scrutiny, with consequences that could extend across the $306 billion stablecoin market and Binance's $639 billion quarterly spot trading volume.
On September 14, 2026, the U.S. Attorney's Office for the Southern District of New York filed a civil forfeiture complaint targeting approximately $61 million in USDT distributed across 10 digital wallet addresses. The filing names two Chinese-incorporated entities — Blessed Trust and Hexa Whale — as the primary laundering vehicles.
According to court documents, the scheme operated as follows:
The forfeiture action was announced as part of Operation Economic Outcast, which launched in August 2026. Prosecutors stated that the $61 million represents a fraction of the total $1.5 billion pipeline. The complaint does not accuse Binance of direct wrongdoing in the forfeiture action itself.
The USDT-on-TRON routing is consistent with broader patterns in sanctions evasion. TRON currently hosts $94 billion in circulating USDT and processes approximately $25 billion in daily USDT transfer volume, according to Token Terminal data from September 2026.
Bloomberg reported on September 22 that federal prosecutors have opened a separate criminal investigation into Binance's own compliance practices. The probe examines whether the exchange's systems and procedures adequately prevented transactions involving Iran in accordance with U.S. sanctions requirements.
Key facts about the investigation:
Binance CEO Richard Teng stated: "We have zero tolerance for sanctions violations or illicit activity, and we did not permit any transactions with sanctioned individuals. We will continue to cooperate with law enforcement on this matter, as we have done since it was first raised months ago."
Prosecutors have not filed charges against Binance or any of its employees in connection with this investigation as of September 24, 2026.
The current probe is the latest entry in a compliance record that stretches back to the exchange's founding:
| Date | Event | |------|-------| | 2017–2022 | Binance admitted to 1,667,153 apparent sanctions violations involving U.S. persons and transactions with sanctioned territories, per OFAC settlement documents. | | Nov 21, 2023 | Binance pleaded guilty to violating the Bank Secrecy Act and U.S. sanctions laws. Founder Changpeng "CZ" Zhao resigned as CEO and pleaded guilty personally. Total financial penalty: $4,316,126,163 ($2.51B forfeiture + $1.81B fine). CZ paid a $50M personal fine. | | Apr 2024 | CZ sentenced to four months in federal prison. | | 2024 | Two compliance monitors installed — one reporting to DOJ, one to FinCEN — as part of the plea agreement. | | Mar 2024–Aug 2025 | Binance internal compliance investigators allegedly uncovered $1 billion+ in flows to Iran-linked entities through the exchange, per reporting by the Wall Street Journal and New York Times. | | Late 2025 | At least five compliance investigators who surfaced these findings were fired, according to WSJ and NYT. Binance denied the characterization and sent legal letters demanding corrections. | | Oct 23, 2025 | President Trump pardoned CZ, stating the prosecution was part of the "Biden Administration's war on cryptocurrency." | | Feb 2026 | Sen. Blumenthal opened a Senate probe, alleging Binance facilitated $1.7 billion in money laundering to Iran proxies and Russia's shadow fleet. | | Apr 2026 | Sen. Blumenthal pressed Binance co-CEO Teng on potential misrepresentations and failure to provide requested documents. Senior compliance staff exited the company. | | May 2026 | Treasury Department sent a letter demanding Binance comply with the monitoring program it agreed to under the 2023 plea. | | Sep 14, 2026 | DOJ filed $61M civil forfeiture tied to Iranian oil proceeds laundered through Binance. | | Sep 22, 2026 | Bloomberg reported the new criminal investigation. |
Binance has stated it achieved a 96.8% reduction in sanctions exposure between January 2024 and July 2025.
The 2023 settlement mandated two independent compliance monitors with direct reporting lines to federal agencies. The monitors' status has become a focal point for lawmakers.
In April 2026, Sen. Blumenthal wrote to both DOJ and the Treasury Department asking whether the monitors had filed any misconduct reports and requesting all related documentation. His letter noted that "in early 2026, reporting stated that Binance had facilitated billions of dollars of sanctions evasion for Iran-linked entities" — activity that would have occurred while the monitors were in place.
The existence of an active criminal probe suggests federal authorities have concluded the monitoring arrangement may be insufficient or that new compliance failures emerged despite oversight. The three-year monitorship, which began in 2024, is scheduled to end in 2027.
If prosecutors determine that Binance violated the terms of its 2023 plea agreement, the consequences could include additional penalties, an extension of the monitoring period, or — in the most severe scenario — revocation of the plea deal itself.
The Binance probe is one element of a broader enforcement surge targeting crypto-enabled sanctions evasion tied to Iran.
June 2, 2026: OFAC designated Iran's four largest domestic crypto exchanges — Nobitex, Wallex, Bitpin, and Ramzinex — along with four individual executives. According to Chainalysis, these four exchanges accounted for approximately $7.7 billion, or 78%, of Iran's $9.9 billion in attributed 2025 crypto volume. Nobitex alone processed more than half of all Iranian digital asset inflows in 2025.
Enforcement infrastructure:
Executive Order 14412, signed June 22, 2026, mandates all U.S. federal agencies and contractors migrate to compliance systems capable of identifying and blocking sanctioned digital asset transactions.
The pattern is clear: U.S. authorities are treating crypto-based sanctions evasion with the same severity as traditional financial system violations, and enforcement budgets and staffing reflect this priority.
Binance remains the dominant centralized exchange by most measures:
Any material enforcement action against Binance would carry systemic implications. The exchange's market share concentration means that counterparty risk extends beyond Binance itself to stablecoin issuers (who hold reserves on the platform), market makers (who use it for liquidity provision), and institutional custodians (who rely on its order books for price discovery).
The 2023 settlement already demonstrated the potential for disruption: CZ's resignation, the $4.3 billion penalty, and the operational constraints of compliance monitoring did not materially reduce Binance's market share, but they did alter the exchange's corporate structure and governance.
The DOJ's criminal investigation into Binance's Iran-related compliance failures represents the third major U.S. enforcement action against the exchange in three years. The progression — from the $4.3 billion settlement in 2023, to a Senate probe in February 2026, to a new criminal investigation in September 2026 — suggests that federal authorities view the exchange's compliance remediation as incomplete.
The investigation's outcome will test whether the post-settlement monitoring framework imposed on the world's largest crypto exchange is adequate to prevent sanctions evasion at scale. With $1.5 billion in alleged illicit flows attributed to just two entities using Binance accounts, the case also raises broader questions about the capacity of any centralized exchange to police stablecoin transfers routed through self-custodied wallets and cross-chain infrastructure.
For the broader market, the probe underscores the cost of compliance failure in a regulatory environment where OFAC has tripled its crypto enforcement budget and designated entire national exchange ecosystems. Binance holds roughly 39% of centralized spot volume. The consequences of this investigation, whatever they are, will not be contained to one company's balance sheet.