Shortly after Donald Trump pardoned Changpeng Zhao, the founder of Binance, last fall, revelations emerged suggesting the cryptocurrency exchange may have facilitated the transfer of billions of dollars to Iranian entities, according to reports from the New York Times and the Wall Street Journal.
Internal investigators at Binance reportedly discovered that over 1,500 accounts on the platform were accessed by individuals in Iran. Specifically, two accounts allegedly moved $1.7 billion to groups backed by Iran, including Yemen’s Houthi militants, throughout 2024 and 2025. These findings predated Trump’s pardon of Zhao in October, raising questions about the timing and motivations behind the presidential action.
The investigators, after reporting their findings to Binance executives, faced repercussions. At least four employees were reportedly fired or suspended, with the company citing “violations of company protocol” related to client data handling. Binance, however, denies that these dismissals were linked to the investigation into potential sanctions violations. A spokesperson stated to the Guardian, “No investigator was dismissed for raising compliance concerns or for reporting potential sanctions issues.”
Binance’s History of Compliance Issues and Zhao’s Legal Battles
Binance’s current predicament is not isolated. In 2023, the company pleaded guilty to money laundering charges and Zhao resigned as CEO. He was subsequently sentenced to four months in prison, alongside a $50 million fine and a ban from involvement in the company’s operations. As part of the plea agreement, Binance committed to actively pursue and penalize those using its platform for illicit financial transactions, including those originating from Iran.
The pardon granted by Trump to Zhao drew criticism, with the former president downplaying the severity of the crimes. He stated, “They say what he did was not even a crime. It wasn’t a crime,” and attributed the prosecution to political motivations by the Biden administration. This pardon occurred amidst reported connections between the Trump family and Binance, including collaboration on a stablecoin project, USD1, and Zhao’s attendance at a conference at Mar-a-Lago.
$1 Billion Flow Via Tron Blockchain and Purged Investigators
Further complicating matters, a separate report from AInvest indicates that approximately $1 billion may have flowed to Iran-linked entities through Binance via the Tron blockchain and Tether (USDT) between March 2024 and August 2025. This occurred while Binance was under court-ordered monitorship, a condition imposed after the 2023 guilty plea and intended to ensure regulatory compliance. The AInvest report highlights a significant contradiction between Binance’s public commitment to “regulatory maturity” and the alleged continued facilitation of illicit financial flows.
Adding to the concerns, AInvest reports that Binance purged at least five internal investigators, including individuals with law enforcement backgrounds, after they uncovered these compliance failures. This move raises questions about the company’s commitment to transparency and accountability, and suggests a prioritization of silencing internal scrutiny over upholding compliance obligations.
Potential Liquidity Risk and Increased Scrutiny
The AInvest report frames the $1 billion flow as a potential “liquidity risk signal,” suggesting that Binance’s continued involvement in potentially sanctioned transactions could expose the company to further penalties. The report notes that Binance had claimed a 34% expansion of its compliance team, but the recent staff cuts contradict this assertion, potentially increasing the risk of new fines exceeding $4.3 billion as U.S. Authorities review ongoing violations.
The timing of these events, including the Trump pardon and the reported flow of funds to Iran, has intensified scrutiny on Binance. The discovery of these transactions, made by internal investigators before the pardon, raises questions about whether the pardon was influenced by factors beyond the legal merits of the case. The White House has not yet issued a comment on the matter.
The situation underscores the ongoing challenges of regulating the cryptocurrency industry and the potential for digital assets to be used for illicit purposes. Binance’s case serves as a stark reminder of the importance of robust compliance programs and the need for greater transparency in the cryptocurrency ecosystem. The company’s future hinges on its ability to demonstrate a genuine commitment to adhering to sanctions regulations and preventing its platform from being used to finance terrorism or other illegal activities.
