DOJ says companies used Binance to funnel $1.5 billion in crypto to Iran

The DOJ Forfeiture Complaint and Scheme Details

The US Department of Justice is accusing several companies of using the crypto exchange Binance to send money to Iran to fund its military, according to a report by The Wall Street Journal. Federal prosecutors disclosed Binance's alleged role in the scheme in a forfeiture complaint that looks to seize $61 million of cryptocurrency. In total, they say that around $1.5 billion was sent to the country via a series of interrelated digital wallets.

This scheme involves the following elements:

• Two Hong Kong-based companies called Hexa Whale and Blessed Trust, which acted as intermediaries to sell black-market Iranian oil to Chinese buyers.
• The US Attorney's Office stating that the companies used "Binance to conduct cryptocurrency transactions representing the proceeds of black-market sales of Iranian oil to buyers in China."
• Some of the money being sent through the US financial system before ending up in Iran.
• Transactions allegedly designed to hide the original source of the funds.

Binance's Role and Internal Response

Binance confirmed the scheme, as the company's internal investigators found that the two entities, among others, had moved heaps of money through the exchange to a network that was funding Iran's Islamic Revolutionary Guard Corps. The crypto exchange removed both Hexa Whale and Blessed Trust from the platform, though it's worth noting that the latter was an actual Binance business partner that provided payment services. It also fired some of the investigators that found the suspicious transactions, which seems like an odd move. The company says these investigators were fired because of "individual circumstances."

Past Scandals and Legal Issues

This is just the latest Binance-affiliated scandal. The company actually pled guilty to violating anti-money-laundering and sanctions laws back in 2023, agreeing to pay billions of dollars in fines. Binance founder Changpeng Zhao spent four months behind bars on related charges, though was later issued a full pardon by President Trump.

The exchange has recently been accused of allowing an Iranian financier named Babak Zanjani to send over $850 million over two years to help fund the country's war chest, though Zanjani denies the allegations. Investors also lost millions during a system outage, which led to a class action lawsuit.