U.S. Justice Department Reviews Whether Binance Violated 2023 Settlement Agreement
The U.S. Department of Justice is reviewing whether Binance has violated a significant settlement agreement previously reached with the U.S. government. Law enforcement is also investigating whether trading activities on the platform violate U.S. sanctions against Iran.
Tysen Duva, head of the DOJ's criminal division, confirmed in an interview that officials are examining Binance's compliance with the 2023 agreement. He declined to discuss specific details and did not indicate that Binance had violated the settlement.
In the 2023 settlement, Binance admitted to violating U.S. anti-money laundering and sanctions laws, agreeing to pay approximately $4.3 billion in fines and to implement enhanced compliance controls and oversight. The company's founder, Changpeng Zhao, also pleaded guilty at that time.
The review focuses on trading activities on the platform after the settlement. In September, the Manhattan District Attorney's Office sought to seize approximately $61 million in crypto assets, claiming they were derived from Iranian black market oil sales and laundered through Binance accounts.
Prosecutors noted that the related network involved over $1.5 billion in Iranian oil revenue flows. The investigation is led by the Manhattan U.S. Attorney's Office in collaboration with the Washington criminal division, focusing on whether Binance failed to prevent transactions that should have been intercepted.
Binance previously stated it has a zero-tolerance policy for sanction violations and claimed to have identified relevant activities and taken action. The DOJ's review is ongoing, and no conclusion has yet been reached regarding whether there has been a violation of the settlement.
The funding paths are concentrated on Iranian-related funds transferred through platform accounts after the settlement, benefiting networks that evade sanctions, while placing pressure on Binance's compliance obligations and oversight.
Source: Public Information
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Binance reached a settlement with the U.S. Department of Justice and others in November 2023, admitting to violations of the Bank Secrecy Act and sanctions regulations, paying approximately $4.3 billion in fines (including forfeitures and penalties), accepting three years of compliance monitoring, and exiting the U.S. market. Founder Changpeng Zhao pleaded guilty at that time and served four months in prison before being pardoned.
This review focuses on trading activities after the settlement, particularly the flow of funds related to Iranian oil revenues. In September, the Manhattan District Attorney initiated civil forfeiture proceedings against approximately $61 million in assets, claiming they were laundered through Binance accounts, with the related network involving over $1.5 billion in total. The DOJ's criminal division is collaborating with the Manhattan District Attorney to assess whether the compliance system effectively intercepts sanctioned transactions.
Similar situations have been seen with other large exchanges facing ongoing sanction compliance reviews after settlements, where some platforms historically faced additional penalties or extended monitoring for failing to maintain sanction screening. Currently, cryptocurrency exchanges are transitioning from one-time large settlements to ongoing compliance and real-time sanction monitoring requirements.
This essentially represents a regulatory shift: the settlement agreement transforms a one-time fine into ongoing compliance obligations and monitoring mechanisms. The mechanism requires companies to proactively report and block sanction-related transactions; if related fund flows occur post-settlement, regulators can review whether it constitutes a breach and seek additional penalties or extended monitoring, shifting the focus from historical violations to the actual effectiveness of promised control measures.
ABAB News · Cognitive Law
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