US Justice Department says millions in Iran oil proceeds laundered on Binance

THE US Justice Department is seeking forfeiture of US$61 million it says was generated from Iranian black-market oil sales and laundered through the cryptocurrency exchange Binance.

In a civil forfeiture claim filed on Monday, federal prosecutors in Manhattan alleged that Iran used cryptocurrency to launder more than US$1.5 billion in illicit oil money.

According to US prosecutors, two Chinese entities used trading accounts on Binance as part of a scheme to funnel the oil proceeds to Iran, its agents and proxies where it was used to finance military and terrorist activities.

The two entities Blessed Trust Limited and Hexa Whale Trading presented themselves as a wealth management firm and commodities broker respectively, prosecutors said.

They allegedly also used the US financial system to send and receive tens of millions of dollars as part of the scheme. Blessed Trust didn’t immediately respond to a request for comment and contact information for Hexa Whale couldn’t immediately be found. 

“Today we are seizing and seeking to forfeit more than US$61 million of the Government of Iran’s money, which otherwise would have promoted hostile military action and terrorist attacks against the US and our allies,” Manhattan Deputy US Attorney Sean Buckley said in a statement. 

Prosecutors didn’t accuse Binance of wrongdoing. The firm said it didn’t permit any transactions with people who were sanctioned.

“We will continue to cooperate with law enforcement on this matter, and where sanctions or illicit-finance risk is identified, we will always investigate, restrict or freeze accounts where appropriate, offboard users, and report to relevant authorities,” Binance said in a statement.

The forfeiture claim is the latest legal manoeuvre by US prosecutors involving Iran in recent months as fighting between the countries continues.

SEE ALSO

Oil settles higher after Saudi strikes stoke supply worries

The US alleged on Monday that accounts holding the illicit oil proceeds were used to transfer crypto to an Iranian crypto exchange and money transmitters that are fronts for Iran’s Islamic Revolutionary Guard Corps. Iran’s UN Mission didn’t immediately respond to a request for comment. 

In February, the New York Times and Wall Street Journal reported on an internal Binance investigation finding more than US$1 billion had moved through the platform to Iranian entities with links to terrorist groups.

Following the reports, Binance said in blog posts that it cooperated with law enforcement officials and that its compliance programme was robust. Binance has said it off-boarded Hexa Whale and Blessed Trust before the reports earlier this year. 

The cryptocurrency exchange’s controls were under intense legal scrutiny in 2023 when the Justice Department charged the company and its co-founder for flouting anti-money laundering rules.

In that case, prosecutors said terrorist groups, people living in sanctioned countries and cyber criminals used the platform to move hundreds of millions of dollars. 

Binance paid a US$4.3 billion fine to resolve the probe and co-founder Changpeng Zhao pleaded guilty to violating banking laws. He spent four months in prison. President Donald Trump granted Zhao a pardon last year. BLOOMBERG