The global cryptocurrency exchange Binance faces renewed scrutiny as leaked internal documents highlight alleged compliance failures. A report reveals that despite the exchange’s promise to improve controls following a 2023 settlement with US authorities, hundreds of millions of dollars have transited through accounts underscored for suspicious activities.
Former Prosecutor Questions Binance’s Operations
Data examined indicates that several accounts, marked with worrying red flags—including affiliations with terror financing, abnormal login behaviors, and unsuccessful identity verifications—continued operations even after Binance’s plea agreement. Among these, 13 accounts processed $1.7 billion in transactions, with an unsettling $144 million flowing through after the settlement was finalized.
One particularly alarming account reportedly received over $177 million in cryptocurrency over two years, featuring irrefutably suspicious behavior, such as altering banking details 647 times in just 14 months, operating through 496 distinct accounts across the Americas. Former federal prosecutor Stefan Cassella emphasized the dubiousness of such activity, stating, “That qualifies as suspicious. It looks like someone is acting as a money-transmitting business.”
The controversy extends further with another account transferring $93 million via Binance between 2021 and 2025, some of which allegedly linked back to a network accused by US officials of covert fund transfers for Iran and the militant group Hezbollah.
Binance’s Assurance of Compliance Measures
The leaked documents detail that these 13 accounts collectively received a staggering $29 million in Tether’s USDT stablecoin from accounts later frozen by Israeli authorities under anti-terrorism legislation. Most of these transfers allegedly originated from four crypto wallets tied to Tawfiq Al-Law, a Syrian known for funneling funds to Hezbollah and Iranian-backed Houthi forces. Israeli authorities seized these accounts in May 2023, while the US Treasury sanctioned Al-Law in March of the following year.
In response to these serious allegations, Binance claimed it maintains “strict compliance controls and a zero-tolerance approach to illicit activity,” asserting the existence of robust systems to identify and investigate suspicious transactions. However, following the settlement, independent monitors appointed by the Justice Department and Treasury began overseeing Binance’s compliance measures in May 2024, yet many of the scrutinized transactions took place after this oversight initiated.
Jessica Davis, a former intelligence agent from Canada, weighed in on the evolving compliance landscape, noting that a “relaxed compliance environment” followed former CEO Changpeng Zhao’s (CZ) pardon from President Trump earlier this year. Davis remarked, “Previously, the incentive was: keep your CEO out of jail. Yes, there are fines, but part of the problem is that we’re just talking about so much money being made on these platforms that even a billion-dollar fine becomes fairly meaningless.”
As the investigation unfolds, the ramifications for Binance and the broader cryptocurrency ecosystem will be closely watched. As of now, Binance’s native token, BNB, is trading at $867.42, a stark 37% decline from its all-time high of $1,369 recorded in October of this year.
