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

President Trump pardoned the exchange’s founder last year after he pled guilty to violating anti-money-laundering laws.

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

This scheme involves two Hong Kong-based companies called Hexa Whale and Blessed Trust, which acted as intermediaries to sell black-market Iranian oil to Chinese buyers. Binance itself confirmed this, 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 US Attorney’s Office has said that the companies used “Binance to conduct cryptocurrency transactions representing the proceeds of black-market sales of Iranian oil to buyers in China.” The complaint goes further and says that some of the money was sent through the US financial system before ending up in Iran. These transactions were allegedly designed to hide the original

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.”

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.

Other than speculation, I’m still not entirely sure what legitimate uses there are for cryptocurrencies. Sending money to a foreign governments I can tell, the key use case here is funding organizations in secret (see above), buying drugs and weapons on the dark web and scamming people. What a technology!

Source: www.engadget.com