Federal prosecutors investigate Binance for potential Iran sanctions violations

Federal prosecutors in Manhattan have filed a civil forfeiture complaint seeking to seize approximately $61 million in cryptocurrency linked to alleged money laundering involving proceeds from black-market Iranian oil sales. The funds were reportedly funneled through Binance trading accounts operated by two Hong Kong-based entities, raising fresh questions about the exchange’s ability to police illicit activity on its platform.

The complaint, filed on September 14, names Blessed Trust and Hexa Whale Trading as the entities accused of facilitating fund transfers that ultimately supported the Iranian government, including entities linked to the Islamic Revolutionary Guard Corps. The IRGC carries a US designation as a terrorist organization, which makes any financial dealings connected to it a serious federal matter.

What the feds are alleging

Prosecutors say the $61 million targeted in the forfeiture represents a slice of a much larger scheme. The broader alleged operation reportedly funneled over $1.5 billion in illicit oil proceeds through various digital wallets, with the oil itself directed toward Chinese buyers.

The transactions at the center of this complaint occurred between May and June of 2025. Hexa Whale Trading allegedly processed roughly $490 million in trading volume through its Binance accounts, while Blessed Trust’s volume reached approximately $1.2 billion.

Both accounts have since been removed from the platform. Binance offboarded Hexa Whale in August 2025 and Blessed Trust in January 2026, though prosecutors appear to view those actions as insufficient given the scale of activity that preceded them.

It is worth noting what this complaint is not: a criminal charge against Binance itself. The exchange is not named as a defendant, and its representatives have stated the company remains committed to sanctions compliance and is cooperating with law enforcement. The civil forfeiture targets the assets, not the exchange operator.

A familiar pattern of scrutiny

This latest action lands on top of a compliance record that Binance has been trying to rehabilitate for years. In 2023, the exchange entered a guilty plea that resulted in a $4.3 billion penalty, one of the largest corporate fines in US history, for anti-money laundering failures and sanctions violations. Former CEO Changpeng Zhao stepped down as part of the resolution and served a prison sentence.

But internal compliance findings that surfaced earlier in 2026 painted a less reassuring picture. Reports indicated that Binance’s own analysis identified significant transfers, reportedly as high as $1.7 billion, flowing to wallets associated with Iran. That figure dwarfs the $61 million targeted in the current forfeiture and suggests the scope of potential exposure extends well beyond what prosecutors have chosen to act on so far.

Congressional inquiries have also intensified. Lawmakers have pressed for answers about how an exchange operating under a compliance monitor, installed as part of the 2023 settlement, could still serve as a conduit for sanctions evasion at this scale.

The compliance paradox for major exchanges

The civil forfeiture complaint highlights a specific mechanism: Hong Kong-registered entities opening accounts and conducting massive volumes of trades that ultimately serve as a laundering pipeline for sanctioned-country oil revenue. Whether Binance’s Know Your Customer protocols should have flagged these accounts earlier is likely to become a central question as the case develops.

The DOJ has not indicated whether additional forfeiture actions or criminal referrals are forthcoming, but the gap between the $61 million seized and the $1.5 billion in alleged total illicit flows suggests prosecutors have plenty of runway if they choose to pursue it.

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