US regulators have recently intensified their scrutiny of Binance following new allegations that the exchange may have been used to evade sanctions against Iran. The Wall Street Journal reported on Wednesday that US authorities have begun investigating whether Iran has utilized Binance to bypass sanctions.
It is reported that officials from the US Department of Justice have contacted individuals associated with the relevant transactions. Investigators are attempting to find evidence of fund flows that are allegedly transferred through the Binance system. However, authorities have not clarified whether they are investigating the entire Binance exchange or just specific users.
Previously, the Wall Street Journal published findings from an investigation into Binance's internal activities, which sparked controversy. The paper claimed in late February that Binance had halted an internal investigation into over $1 billion in suspicious transactions. The New York Times also echoed similar allegations in its reporting. These reports have drawn the attention of Washington policymakers and regulators.
Binance has strongly denied these allegations and defended its compliance processes. A company spokesperson stated in a written statement: “Binance has absolutely not halted any compliance investigations. The Wall Street Journal continues to report the same false information.” The statement further added: “The fact is, Binance's investigations are ongoing and have uncovered a complex pattern of financial activities spanning multiple jurisdictions, involving Asia, the Middle East, and beyond.” Binance also stated that investigators have gathered information on the relevant activities and have closed related accounts.
Meanwhile, political pressure surrounding the case is also increasing. Senator Richard Blumenthal has launched a separate investigation into potential sanctions violations related to Binance's operations. Additionally, federal officials have reportedly contacted sources familiar with Iranian trading to gather more evidence.
Previously, Binance reached a settlement with US regulators over similar issues. The settlement agreement forced Binance to monitor users and re-screen accounts based on sanctions lists. The agreement also required Binance to undergo five years of independent oversight. Furthermore, CEO Changpeng Zhao stepped down from his leadership position and was sentenced to imprisonment. However, former President Trump later pardoned Zhao in October.