Breaking: US Federal Investigators Probe Iran-Linked Activity on Binance - Exchange Fights Back in Court

U.S. federal investigators are actively examining Iran-linked transactions on cryptocurrency exchange Binance, prompting the platform to file a formal complaint seeking accountability and vowing to fight the allegations in court. The exchange claims sanctions-related exposure has plummeted 96.8%, from 0.284% of total volume in January 2024 to just 0.009% by July 2025.

US federal investigators are examining Iran-linked activity on Binance

The legal fight came as The Wall Street Journal published another report saying the Justice Department is investigating Iran’s use of Binance to evade U.S. sanctions. The paper said the probe followed the dismantling of an internal investigation tied to more than $1 billion that flowed through the platform to a network that funded Iran-backed terror groups. The report also said officials have contacted people with knowledge of the transactions to seek interviews and gather evidence.

The paper said it could not determine whether the department is looking at possible misconduct by Binance itself or only at customers who used the platform. That left a key question hanging over the case. The report also said the matter has drawn attention because of internal company records and testimony from people with knowledge of the transfers, though it did not say the department had reached any final conclusion.

Binance denied direct dealings with sanctioned parties, saying that it “categorically did not directly transact with any sanctioned entities,” and that the platform actually “uncovered a sophisticated, multi-jurisdictional pattern of financial activity.”

According to Binance, Iran-linked connections were “only identified and sanctioned after Binance began investigating and taking action in lock step with law enforcement to shut down this network.”

The exchange also rejected claims about how it handled its internal review and denied WSJ’s claims that it did not fire investigators for raising compliance concerns and said those employees left for individual reasons.

The company added that the internal probe continued and led to the shutdown of the Blessed Trust account earlier this year. It also said the investigation did not show that any users directly transacted with a sanctioned entity, but instead found funds passing through several steps before reaching linked wallets.

Binance also said that later reviews found that only $24 million entered wallets associated with the Islamic Revolutionary Guard Corps, the elite branch of Iran’s armed forces that controls major parts of the Iranian economy.

The issue has also pulled in other U.S. officials. Along with the Justice Department and the Treasury monitor, Sen. Richard Blumenthal of Connecticut, who serves on the Senate Homeland Security Committee, opened an inquiry last month into Binance’s handling of Iranian transactions.

Richard said, “The scale of the newly-revealed illicit transfers, uncaught until nearly two billion dollars flowed to sanctioned entities, and the unexplained firing of internal investigators call into question Binance’s compliance with American sanctions and banking laws.”

After requesting records, he later said Binance’s public response was “evasive” and did “little to ease my concerns.”

A New York court throws out anti-terror claims against Binance

At the same time, Binance announced a separate legal win in the Southern District of New York, which dismissed all claims brought against it under the Anti-Terrorism Act.

That case involved 535 plaintiffs who alleged that Binance provided material support related to 64 terrorist attacks.

In a 62-page decision, the court found that the plaintiffs failed to establish their main allegations. The ruling said they did not show that Binance assisted terrorists, associated itself with terrorist attacks, participated in or tried to advance those attacks, or joined any conspiracy with terrorist organizations. Binance described that ruling as a full dismissal across every allegation raised in the suit.

The court still gave the plaintiffs 60 days to file an amended complaint because of a recent appellate decision. Even so, Binance said it does not believe any amended filing can fix the core problems the judge identified. The company said those claims have already been examined and rejected.

Binance added that more than 300 million users worldwide rely on its security measures and user protections every day.

“The Treasury Department-appointed monitor overseeing the company’s compliance program also recently requested that the exchange provide information about the Iranian transactions, including about a business partner that sent much of the money,” said the Journal.

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