The U.S. Attorney's Office for the Southern District of New York filed a civil forfeiture complaint on Sep. 14 seeking approximately $61 million in cryptocurrency linked to black-market sales
The U.S. Attorney's Office for the Southern District of New York filed a civil forfeiture complaint on Sep. 14 seeking approximately $61 million in cryptocurrency linked to black-market sales of Iranian crude oil.
According to the DOJ, the funds were allegedly meant to support the Iranian government and its military, including the Islamic Revolutionary Guard Corps, or IRGC. The U.S. government has designated the IRGC as a terrorist organization.
A civil forfeiture complaint is a legal action in which the government seeks to seize money or property it believes was involved in or resulted from criminal activity. It is not a criminal charge, the allegations are not proven until a court rules in the government's favor.
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The complaint alleges that two Chinese companies, Blessed Trust and Hexa Whale, used trading accounts at Binance to launder proceeds from sanctioned Iranian oil sales. Binance is the world's largest cryptocurrency exchange by daily trading volume.
Despite presenting themselves as a wealth management firm and a commodities broker respectively, both companies allegedly received and transferred proceeds tied to Iranian oil and provided services to convert traditional currency into cryptocurrency, according to the DOJ.
A network of interrelated cryptocurrency addresses, referred to as "Entity A" in the complaint, allegedly received and distributed more than $1.5 billion in illicit Iranian oil proceeds.
According to the filing, the funds were funneled to IRGC-related money services businesses, IRGC-linked crypto addresses and an Iranian cryptocurrency exchange. The FBI's New York Counterintelligence and Espionage Division is handling the investigation.
Binance co-CEO Richard Teng wrote on X that the case was not filed against Binance and does not allege any wrongdoing by the exchange.
He said the company has "zero tolerance for sanctions violations or illicit activity" and has been cooperating with law enforcement since the matter was first raised months ago.
He added that the exchange will investigate, restrict or freeze accounts, offboard users and report to authorities wherever sanctions or illicit finance risk is identified.
A Binance spokesperson separately told TheStreet Roundtable that the case "was not filed against Binance and does not allege wrongdoing by the company."
Binance said that the company "did not permit any transactions with sanctioned individuals" and will continue to cooperate with law enforcement on the matter. It will also "investigate, restrict or freeze accounts where appropriate, offboard users, and report to relevant authorities" wherever sanctions or illicit finance risk is identified.
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