Binance CEO Richard Teng has strongly rejected a new Wall Street Journal investigation that alleges the cryptocurrency exchange processed $850 million in transactions linked to an Iranian financier, which eventually flowed to Iran's Islamic Revolutionary Guard Corps (IRGC). In a post on X, Teng called the reporting fundamentally inaccurate, asserting that Binance never permitted transactions with sanctioned individuals and that any flagged activity occurred before those individuals were placed under US sanctions.
The Wall Street Journal's report, published on Thursday, identified Babak Zanjani as the central figure in a secret crypto payment network that moved $850 million through Binance accounts over a two-year period. Zanjani, who was re-sanctioned by the US in January, is alleged to have used his firm Zedcex, along with accounts belonging to his sister, romantic partner, and a company director, all operated from the same devices. The Journal claimed that Binance's internal compliance reports flagged the Zedcex account after detecting access from Tehran in late 2024. Despite more than a dozen internal alerts, the account remained open for over a year, according to the newspaper.
Background on Binance's Compliance History
Binance has been under intense scrutiny from regulators worldwide, particularly in the United States. In November 2023, the exchange pleaded guilty to anti-money laundering and sanctions violations, agreeing to pay a record $4.3 billion fine. As part of the settlement, Binance pledged to overhaul its compliance systems and cooperate with law enforcement. The company appointed Richard Teng as CEO in November 2023 to lead the charge in rebuilding trust and ensuring regulatory adherence. Teng, a former regulator from Singapore, has emphasized Binance's commitment to compliance and transparency.
Despite these efforts, the Wall Street Journal has published multiple reports alleging that Binance continued to facilitate transactions involving sanctioned entities. In March, the Journal reported that the US Justice Department is investigating Iran's use of Binance to evade sanctions following the 2023 guilty plea. Binance has denied knowledge of any such investigation and reiterated its cooperation with regulators. The exchange also filed a defamation lawsuit against the Journal, seeking damages and a jury trial, claiming that the newspaper's reporting contains false and misleading statements.
The WSJ's Latest Allegations
The latest WSJ report goes beyond Zanjani's network to allege broader Iranian involvement with Binance. The newspaper claimed that Iran's central bank moved $107 million in cryptocurrency into Binance accounts in 2025, and a foreign law-enforcement agency tracked roughly $260 million in direct transactions between Binance accounts and Iranian terrorist financiers during 2024 and 2025. These figures, if accurate, would underscore significant gaps in Binance's compliance infrastructure, despite the company's promises post-settlement.
Binance has consistently denied any wrongdoing. In his X post, Teng wrote: "Binance has zero-tolerance for illicit activity and has built and operates a best-in-class industry-leading compliance program that continues to grow." He also claimed that Binance had investigated the issues before the Journal contacted the company, and that facts it provided were not included in the story. The exchange has pointed to its advanced AI-powered security systems, which it says have thwarted $10 billion in fraud since 2025.
The Broader Context of Iran Sanctions
Iran has been under extensive US sanctions for decades, with the goal of isolating the country economically and preventing it from funding nuclear and terrorist activities. The IRGC is designated as a terrorist organization by the US, and any financial transactions involving the group are illegal under US law. Cryptocurrencies have become an increasingly popular tool for bypassing sanctions, as they allow for pseudonymous cross-border transfers that can evade traditional banking controls. This has prompted regulators to tighten oversight of crypto exchanges, with Binance being a primary focus due to its size and global reach.
Babak Zanjani is a well-known Iranian businessman convicted in Iran for fraud linked to oil sales and bank violations. He was previously sanctioned by the US in 2012 for facilitating transactions for the Iranian government. The US Treasury reimposed sanctions on him in January 2026, just months before the WSJ report. The timing of the re-sanction and the alleged transactions raises questions about whether Binance's compliance systems were effective in identifying and blocking suspicious activity involving Zanjani and his network.
Binance's Response and Legal Actions
Binance's denial of the WSJ report is the latest in a series of public rebuttals. In February, the Journal alleged that Binance shut down an internal investigation into roughly $1 billion that flowed through the platform to networks linked to Iranian proxy groups. Binance denied dismantling any compliance investigation, saying its internal probe continued and uncovered a sophisticated, multi-jurisdictional pattern of financial activity across Asia, the Middle East and beyond. The exchange published a blog post addressing what it called false claims, and separately responded to a Senate inquiry in March, denying it facilitated transactions to Iranian entities.
The legal battle between Binance and the Wall Street Journal has escalated, with Binance filing a defamation lawsuit after the March report. The exchange is seeking a jury trial and damages for what it describes as a pattern of biased reporting. Legal experts note that defamation cases involving news organizations are difficult to win, especially when the reporting involves matters of public interest. However, Binance appears determined to clear its name as it works to maintain its position as the world's largest cryptocurrency exchange by trading volume.
Regulatory and Industry Implications
The ongoing allegations against Binance have significant implications for the broader cryptocurrency industry. They highlight the tension between the decentralized nature of digital assets and the need for centralized exchanges to comply with international sanctions and anti-money laundering rules. If the allegations are proven true, they could lead to even stricter regulations for crypto exchanges, potentially requiring more stringent KYC (Know Your Customer) procedures and real-time transaction monitoring. On the other hand, if Binance is vindicated, it could bolster its argument that it has reformed and is now a compliant player in the financial system.
Other major exchanges are closely watching the situation. Coinbase, Kraken, and others have already invested heavily in compliance to avoid similar scrutiny. The case also underscores the challenges of policing cross-border crypto flows, as blockchain analysis firms can track transactions but often cannot identify the beneficial owners behind wallets. This has led to calls for better coordination between exchanges, regulators, and law enforcement agencies globally.
Binance's denials and legal actions are part of a broader strategy to rebuild its reputation after the 2023 guilty plea. The exchange has hired former regulators and law enforcement officials, including former US Treasury officials, to bolster its compliance team. It has also implemented new features such as mandatory identity verification for all users and enhanced transaction monitoring using machine learning algorithms. These measures have been praised by some industry observers, but critics argue that they may not be sufficient to prevent sophisticated evasion schemes like those described in the WSJ reports.
Technical Details of the Alleged Scheme
The Wall Street Journal's reporting detailed how Babak Zanjani's network allegedly used Binance to launder money. According to the newspaper, Zanjani's firm Zedcex operated multiple accounts that were accessed from the same IP addresses in Tehran. Binance's own compliance software flagged these accounts for unusual activity, such as rapid movements of large sums and connections to high-risk jurisdictions. Despite the alerts, the accounts remained active for over a year, processing transactions worth hundreds of millions of dollars. The Journal claims that Binance's internal investigators recommended shutting down the accounts and reporting them to authorities, but that senior management overruled these recommendations.
Binance has disputed this narrative, stating that its compliance team acted appropriately and that any delays were due to the complexity of the investigation. The exchange also noted that it has proactively shared information with US and international law enforcement agencies, including the Financial Crimes Enforcement Network (FinCEN) and the FBI. However, the Journal's sources claim that Binance was slow to act and that the Justice Department's investigation is ongoing.
The case has drawn attention from lawmakers in Washington, D.C., who have called for tighter controls on crypto exchanges. Senator Elizabeth Warren, a longtime critic of the crypto industry, has introduced legislation to extend anti-money laundering requirements to all crypto firms, including decentralized platforms. The Binance-Iran allegations provide additional ammunition for supporters of such regulations, though opponents argue that overregulation could stifle innovation and drive businesses offshore.
Binance's future hinges on its ability to convince regulators and the public that it has turned over a new leaf. The company's aggressive legal response to the Wall Street Journal suggests it is prepared to fight allegations it considers false. At the same time, the exchange continues to expand its services, including launching new products like SpaceX-linked perpetual futures and an AI-powered security system that it claims has prevented $10 billion in fraud since 2025. These developments are part of Binance's effort to demonstrate that it can be both innovative and compliant.
The debate over the WSJ report is unlikely to end soon. As more details emerge, both Binance and the Journal are likely to present conflicting evidence. For now, the crypto community remains divided, with some defending Binance's efforts and others calling for greater accountability. The outcome of the defamation lawsuit and any potential regulatory actions will shape the future of cryptocurrency regulation in the United States and beyond.
Source: Cointelegraph News