Binance Files Defamation Lawsuit
Binance has filed a defamation lawsuit against The Wall Street Journal following a report that linked the exchange to alleged Iran-related cryptocurrency transfers.
The company said the February 23 article damaged its reputation and triggered what it described as “baseless and unnecessary inquiries” from government officials.
According to Binance, the lawsuit seeks to hold the newspaper accountable for what it considers inaccurate reporting about its compliance practices. The exchange also emphasized that its exposure to sanctions-related activity has dramatically decreased in recent years.
Justice Department Investigation Reported
The legal dispute comes as the newspaper published a separate report claiming that the U.S. Department of Justice is examining whether Iran-linked networks used Binance to bypass U.S. sanctions.
According to the report, investigators are reviewing transactions that allegedly routed more than $1 billion through the exchange to a financial network connected to Iran-backed groups. Officials have reportedly contacted individuals familiar with the transactions to gather evidence and conduct interviews.
However, the report also noted that investigators have not determined whether Binance itself engaged in wrongdoing or whether the investigation focuses solely on users who accessed the platform.
Binance Denies Direct Sanctions Violations
Binance strongly rejected claims that it directly processed transactions with sanctioned entities.
Instead, Binance said it discovered a complex pattern of financial activity spanning multiple jurisdictions and worked with authorities to shut down the network involved.
According to the exchange, Iran-linked connections were only identified after its internal compliance investigation uncovered suspicious activity. Binance also said its investigation ultimately led to the closure of an account linked to the activity earlier this year.
Smaller Amount Reached Sanctioned Wallets
The company further claimed that subsequent reviews showed only about $24 million of the funds reached wallets associated with the Islamic Revolutionary Guard Corps.
That group is a powerful branch of Iran’s armed forces and is subject to U.S. sanctions. Binance argued that the funds moved through multiple intermediary steps before reaching those wallets. The exchange also rejected claims that it dismissed internal investigators who raised compliance concerns, saying the employees left for unrelated reasons.
Political Scrutiny Intensifies
The issue has also attracted attention from lawmakers in Washington.
Richard Blumenthal launched an inquiry last month into Binance’s handling of Iranian transactions. Blumenthal, a member of the Senate Homeland Security Committee, said the scale of alleged illicit transfers raised serious questions about the exchange’s compliance procedures.
He argued that the movement of funds to sanctioned entities had gone undetected for too long. After reviewing Binance’s response to his request for records, the senator described the company’s explanation as “evasive.”
Court Dismisses Separate Terrorism Case
At the same time, Binance recently secured a legal victory in a separate case in the Southern District of New York.
A federal court dismissed claims brought by 535 plaintiffs under the Anti-Terrorism Act, which accused the exchange of providing support linked to 64 terrorist attacks.
In a 62-page ruling, the court said the plaintiffs failed to demonstrate that Binance had assisted terrorists or participated in any conspiracy related to the alleged attacks. The judge dismissed all claims but allowed plaintiffs 60 days to file an amended complaint following a recent appellate court decision.
Binance said it believes any new filing would not resolve the deficiencies identified by the court.
Ongoing Regulatory Pressure
The dispute comes amid ongoing scrutiny of major crypto exchanges as regulators and lawmakers evaluate how digital asset platforms handle sanctions compliance.
According to the Journal, a monitor appointed by the U.S. Department of the Treasury has also requested additional information from Binance regarding the Iran-linked transactions.
Despite the investigations and lawsuits, Binance said more than 300 million users worldwide rely on its security systems and compliance controls.
The outcome of the defamation case and the reported federal inquiries could shape the next chapter in the exchange’s long-running legal battles with regulators and media scrutiny.
