Iranian financier Babak Zanjani operated a secret payment network through Binance to funnel money to the country's military forces, according to internal compliance reports. The scheme ran for at least 15 months and processed $850 million in transactions, with Zanjani's allies running additional accounts from the same devices.

Zanjani, who describes himself as an antisanction operator, built the network as Iran braced for potential conflict with the U.S. The transactions occurred on the world's largest cryptocurrency exchange, mostly through a single trading account. Binance investigators flagged the suspicious activity multiple times, yet the main account remained active through January.

The revelations raise serious questions about Binance's compliance controls and the exchange's ability to prevent sanctioned entities from accessing its platform. Despite the company's zero-tolerance policy for illicit activity, the network operated for years while processing hundreds of millions in transactions. This exposes vulnerabilities in cryptocurrency oversight that regulators have struggled to address.

The case highlights how digital currencies can circumvent traditional financial sanctions, potentially undermining U.S. foreign policy objectives. For investors, it underscores the regulatory risks facing major exchanges that may face increased scrutiny and penalties.