Just when Binance thought its regulatory troubles were behind it, a new Wall Street Journal investigation has dragged the world’s largest crypto exchange back into the centre of a sanctions controversy.
The WSJ reported on May 22 that an Iranian network run by businessman Babak Zanjani processed approximately $850 million in transactions through Binance over a two-year period, with most of the activity flowing through a single trading account. The report, citing internal Binance compliance documents, alleges that roughly half of that sum, around $425 million, may have been used to fund Iranian military operations.
Zanjani describes himself as an “antisanction operator.” Western intelligence agencies have long identified him as a key figure in Iran’s efforts to move money around international sanctions. The WSJ says his network built a covert payment infrastructure designed to keep funding flowing to Iranian military forces even as tensions with the United States escalated through 2025 and into 2026.
Binance CEO Richard Teng responded within hours, calling the report fundamentally inaccurate.
What the WSJ Investigation Found
The details in the report paint a picture of a sophisticated operation hiding in plain sight.
According to the WSJ, Zanjani’s primary account on Binance processed the bulk of the $850 million. But he didn’t operate alone. His sister, a romantic partner, and a senior manager at his company all maintained separate Binance accounts. Internal compliance records reportedly show that all of these accounts were accessed from the same devices, a pattern that Binance’s own investigators flagged as consistent with a coordinated financial network rather than independent individual trading.
Counterterrorism financing experts cited in the report said the accounts didn’t appear to be used for conventional investment. Instead, they functioned as transfer mechanisms, moving money rapidly through matching deposits and withdrawals. That pattern is a hallmark of layering, the money laundering technique where funds are bounced between accounts to obscure their origin.
The WSJ also reported that Iran’s central bank allegedly transferred $107 million in cryptocurrency into Binance accounts last year. Foreign investigators reportedly tracked an additional $260 million in transactions during 2024 and 2025 between Binance-linked accounts and wallets tied to sanctioned Iranian entities.
This isn’t the first time the WSJ has reported on Iranian financial activity through Binance. A February report alleged $1.7 billion in Iran-linked flows through the exchange. The latest investigation adds $850 million on top of that figure.
Binance Fires Back
Richard Teng didn’t mince words in his response. In a statement posted on X, he said the report contained “fundamental inaccuracies” about Binance’s operations and sanctions enforcement.
“Fact: Binance did not permit any transactions with sanctioned individuals on its platform,” Teng wrote. “Fact: Binance proactively investigated these issues before the WSJ outreach.”
The exchange’s position is that it identified the suspicious activity through its own compliance systems and took action independently, not because the media or regulators forced its hand. Binance says it employs over 1,500 compliance specialists and deploys more than 25 monitoring tools for transaction screening and behavioural analytics.
In 2025, Binance processed over 71,000 law enforcement requests and helped seize $752 million in illicit assets globally. The company says its exposure to illicit wallets dropped nearly 97% between January 2024 and July 2025.
Those are impressive numbers. But the core allegation in the WSJ report is hard to wave away: Zanjani’s main account reportedly continued to operate for as long as 15 months after being flagged, and was still open as recently as January 2026. If the compliance systems identified the activity, the question becomes why the account wasn’t shut down sooner.
The Broader Iran-Crypto Connection
The Binance allegations don’t exist in isolation. Iran has been increasingly turning to cryptocurrency as a tool to circumvent the Western sanctions regime that has cut it off from much of the global financial system.
The Nobitex exchange, which is widely used by sanctioned Iranian institutions and ordinary citizens, has processed over $2 billion on the Tron network and approximately $317 million on BNB Chain since January 2023. Since the Iran conflict escalated in late February 2026, at least $22.6 million in cryptocurrency has reportedly moved through Nobitex on BNB Chain alone.
This week’s OFAC sanctions against the Sinaloa Cartel’s crypto laundering network and the ongoing enforcement activity from Tether (which froze $515 million in USDT in 30 days) show that authorities are getting more aggressive about tracking and blocking illicit crypto flows. But the scale of the alleged Iranian activity through Binance suggests that enforcement still has significant gaps.
The US Department of Justice is now reportedly examining Iran’s use of Binance to evade sanctions. That investigation could have serious consequences. Binance already pleaded guilty in 2023 to violations of anti-money laundering and sanctions laws, resulting in a $4.3 billion settlement and the imprisonment of former CEO Changpeng Zhao. A second major enforcement action would raise existential questions about whether Binance has truly reformed its compliance practices.
Why This Matters for the Entire Crypto Industry
Every time a major exchange appears in the same headline as “Iran,” “military funding,” and “sanctions evasion,” it gives ammunition to the people who argue that crypto is primarily a tool for criminals and rogue states.
That framing is misleading. The vast majority of Binance’s $10+ trillion in annual trading volume comes from legitimate users. Stablecoins process billions in lawful commerce every day. Bitcoin ETFs hold over $56 billion in institutional capital. The industry has made enormous progress on compliance and transparency in recent years.
But perception matters. And the perception created by a front-page WSJ investigation alleging that the world’s largest crypto exchange facilitated $850 million in potential military funding for a sanctioned regime is devastating for an industry that’s trying to convince regulators, lawmakers, and the public that it can be trusted.
The timing makes it worse. This report lands just as the CLARITY Act faces over 100 amendments in the Senate, with lawmakers debating exactly how much oversight crypto exchanges should face. Stories like this strengthen the hand of senators who want stricter controls and weaken the position of those arguing for a lighter regulatory touch.
For Binance specifically, the allegations come at a particularly sensitive moment. CZ has been floating the idea of reviving Binance.US. The exchange is expanding into new markets. And the industry is generally moving toward greater institutional legitimacy. A Department of Justice investigation into Iran-linked flows could derail all of that.
The Uncomfortable Reality
Here’s the honest assessment. Either Binance’s compliance systems work and the company identified and addressed the Iranian activity proactively, in which case the WSJ report is overblown. Or the systems failed to stop $850 million in potentially illicit transactions from flowing through the platform for two years, in which case the $4.3 billion settlement from 2023 clearly wasn’t enough to fix the problem.
Binance says it’s the former. The WSJ’s evidence suggests it might be the latter. The DOJ investigation will ultimately determine which version is closer to the truth.
For the average Binance user, this story doesn’t change your day-to-day trading experience. Your funds are safe. The platform continues to operate normally. But it’s a reminder that the exchange you use exists within a much larger geopolitical landscape, and the decisions made at the corporate level about compliance and enforcement have consequences that extend far beyond crypto prices.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making any investment decisions.
