Treasury Orders Binance to Tighten Controls After $1B Iran Flows

The U.S. Treasury has ordered Binance to strengthen transaction monitoring and comply with sanctions and anti-money-laundering rules after a report found more than $1 billion moved to Iran-linked groups through crypto channels tied to the exchange. The agency expects immediate steps to prevent further transfers to sanctioned actors.

Treasury officials contacted Binance following the report and directed the company to outline measures to detect and block transactions connected to Iran-linked entities. The agency asked for plans to improve screening of deposits and withdrawals, enhance flags for suspicious activity, and ensure timely reporting of potential sanctions violations.

Officials did not release a list of the specific transactions referenced in the report. The agency also requested documentation of any internal investigations and evidence of corrective actions to address identified weaknesses, along with regular updates on progress and any suspicious activity uncovered.

U.S. sanctions bar material support to designated foreign actors. Anti-money-laundering rules require financial intermediaries, including virtual asset service providers, to maintain systems that detect and report transactions involving designated parties. Treasury officials cited the speed with which cryptocurrency can move funds across borders when outlining the need for clear transaction-tracing protocols and stronger compliance systems.

Binance, the largest global cryptocurrency exchange by trading volume, has faced regulatory scrutiny over its compliance programs. U.S. authorities have previously warned that insufficient controls can enable sanctions evasion and illicit finance.

If Binance does not provide satisfactory responses or improve controls, the Treasury can refer matters to enforcement agencies that oversee sanctions and financial crimes. Those agencies may pursue civil penalties or criminal investigations.

The action comes amid increased oversight of the cryptocurrency sector as digital assets see wider use. Regulators say they will continue to press major exchanges to meet legal obligations on sanctions screening and transaction monitoring.