Federal prosecutors in Manhattan alleged that two Chinese companies used accounts on the cryptocurrency exchange Binance to launder illegal proceeds from the sale of Iranian oil, the Justice Department said in court papers. The funds were intended to finance the Iranian military, including the Islamic Revolutionary Guards Corps, which the United States has classified as a terrorist organization. Binance was not charged with any wrongdoing. A group of crypto wallets linked to Iran received more than $1.5 billion of the illegal proceeds, though it wasn't clear exactly how much moved through Binance, the world's largest crypto trading platform. The Justice Department plans to seize $61 million currently held in accounts overseen by Tether. The flow of illicit funds through Binance was flagged internally last year by compliance officials, who were later fired or suspended after raising alarms. Binance stated the discipline had nothing to do with their warnings.

Binance previously paid $4.3 billion in penalties in 2023 after pleading guilty to violating U.S. financial laws. Its founder, Changpeng Zhao, stepped down as chief executive and served four months in prison. Last year, Binance partnered with World Liberty Financial, a crypto startup founded by President Trump and his three sons. Mr. Trump granted Mr. Zhao a pardon in October 2024.

According to reports, Hexa Whale, a firm based in Hong Kong, used Binance to send $490 million to crypto wallets tied to Iranian entities. Another $1.2 billion flowed to Iran-linked entities from an account owned by Blessed Trust, a Binance business partner in Hong Kong. Binance has disputed many employee findings, stating Blessed Trust was one of several vendors and that the exchange did not control it. Hexa Whale has ceased operations.