Fired Binance Investigator Tells IRS Firm Ignored $1.2B Iran Probe

A search warrant for a former Binance investigator's MacBook — never reported before — lays out what he told IRS agents in May. He said Binance willfully ignored calls for an internal investigation, code-named "Operation Loclock," into roughly 2,000 accounts suspected of being used by people in Iran. Those accounts moved about $1.2 billion across the exchange.

He left the company shortly after Binance suspended him and several colleagues over their own look at two accounts that appeared to be funneling money to Iran in violation of U.S. sanctions law. Binance tells a different story: a spokesperson had told the New York Times the probe into the offending accounts was never shut down, and the company says the investigators were sacked for mishandling client data, not for what they found. It has offered no detail beyond a breach of its data privacy policy.

The federal case has widened since those departures. The IRS and DOJ have filed multiple subpoenas and warrants on some of the former investigators and on Binance itself. "There is substantial evidence that Binance helped evade sanctions and launder more than a billion dollars from China to Iran and Iran-backed entities," said Gregory Bernstein, a partner at Keller Anderle Scolnick LLP who represents the former senior Binance financial investigator. Bernstein said his client has also been subpoenaed to testify before a federal grand jury in the District of Columbia.

It all lands three years after Binance and founder Changpeng Zhao pleaded guilty and paid $4 billion for failing to stop transactions with sanctioned countries — Iran, Cuba and Syria among them, plus Russian-occupied parts of Ukraine. President Trump later pardoned Zhao. Binance has consistently maintained it broke no Iran sanctions. "We fully cooperate with law enforcement, and we remain committed to rooting out and shutting down bad actors," Binance deputy general counsel Dugan Bliss told Forbes. The company did not answer the allegation that leadership never actively pursued Operation Loclock.

The DOJ confirmed the investigation earlier this year; it centers on the laundering of Chinese purchases of Iranian oil through the exchange. Beyond the 2,000 Iran-linked accounts, two Chinese customers are in the crosshairs: Hexa Whale and Blessed Trust, which allegedly moved funds into crypto wallets later tied to Iran's Islamic Revolutionary Guard Corps. In September, the DOJ announced a seizure warrant for $61 million tied to illicit petroleum sales, claiming the two businesses used Binance to launder black-market Iranian oil proceeds funneled to the Iranian government, its agents or proxies.

The former investigator told the IRS he gathered evidence that an account owned by Blessed Trust was being used to send funds to Iran — and was also paying Binance expenses like salaries. The Times reported earlier this year that Blessed Trust contracted with Binance for payroll and denied wrongdoing; the exchange stopped working with the company earlier this year. No charges have been filed. The former investigator told the IRS that a search of his MacBook would turn up communications confirming the company's knowledge of Iranian use of the platform, plus internal messages from Binance's chief compliance officer arguing the fired investigators had done nothing wrong.