Binance Faces Allegations of $676 Million in Sanctions Evasion Linked to Iran

An investigative report by Reuters published on Friday, July 31, 2026, has raised serious questions about the compliance efforts of Binance, the world's largest cryptocurrency exchange. According to the report, 'Shelbit,' an unregistered Dubai-based exchange with close ties to Iranian state institutions and an extensive gambling network, transferred a total of $676 million to the Binance platform. This investigation has drawn significant market attention, as it comes while Binance claims to be operating an enhanced sanctions screening system following its settlement with the U.S. government.

Shelbit is operated by Siavash Kayvanpour, an Iranian expatriate, and has been identified as a bridge connecting sanctioned Iranian entities to the global cryptocurrency market, processing over $4 billion in transactions since May 2024. Analysis suggests that Shelbit has served as a key hub for financial actors within Iran attempting to evade sanctions by interacting directly with wallets belonging to the Central Bank of Iran.

According to Reuters' data analysis, the total funds flowing from digital wallets linked to Shelbit into Binance reached $676 million. This capital flow is estimated to have occurred as part of a money-laundering process for funds from gambling networks linked to the Islamic Revolutionary Guard Corps (IRGC). The table below details the transaction volume of Shelbit and the inflows to Binance revealed by this investigation.

Since May 2024, Shelbit has processed over $4 billion, acting as a bridge between sanctioned Iranian entities and the global cryptocurrency market.

The scope of this network extends beyond financial institutions to include over 2,000 Persian-language gambling websites promoted by prominent Iranian influencers such as Sasha Sobhani and Pouyan Mokhtari. Reuters confirmed that tens of millions of dollars associated with these gambling sites flowed through Shelbit and ultimately into Binance wallets. This illustrates a typical path through which illicit funds from Iran infiltrate the international financial system via cryptocurrency.

Fund Flows That Ignored Regulatory Shutdown Orders

The most controversial aspect of this case is the correlation between the timing of fund movements and the actions of regulatory authorities. It has been revealed that approximately $540 million, or about 80% of the total amount flowed into Binance, was deposited after the Dubai Virtual Assets Regulatory Authority (VARA) issued a shutdown order to Shelbit. This suggests that the real-time sanctions violation detection system that Binance has claimed to possess failed to reflect warnings from local regulators in a timely manner.

• Total transaction volume processed by Shelbit: Over $4 billion since May 2024
• Total amount tracked to Binance wallets: $676 million
• Amount flowed into Binance after Dubai VARA's shutdown order: $540 million

Binance has refuted these allegations, stating that its compliance program is delivering tangible results. According to internal metrics released by Binance, the proportion of sanctions-related exposure relative to total trading volume decreased by approximately 96.8%, from 0.284% in January 2024 to 0.009% in July 2025. The exchange also claims that its direct exposure to the four major cryptocurrency exchanges in Iran has been significantly reduced between 2024 and early 2026.

Binance CEO Richard Teng reaffirmed the company's position that it strictly adheres to international sanctions and Anti-Money Laundering (AML) protocols, and that it only blocks specific wallets confirmed through thorough investigation. He emphasized that Binance responds to all regulatory requests after investigation and that it has ceased providing services to residents of sanctioned countries since 2018. The following chart shows the downward trend in sanctions exposure as claimed by Binance.

Settlement with the U.S. Government and Future Legal Risks

These allegations are expected to have significant legal repercussions, given that they were raised while Binance is in the process of fulfilling the settlement agreement reached with the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) in 2023. At that time, Binance admitted to over 1.6 million counts of sanctions violations, paid a $4.3 billion fine, and is currently under strict monitoring by a compliance monitor appointed by the U.S. government. If these Iran-linked fund flows are deemed a 'material breach' of the settlement terms, Binance could face additional fines reaching the legal maximum.

Binance is continuing to take a strong legal stance against critical media reports. In March 2026, Binance filed a defamation lawsuit against The Wall Street Journal (WSJ), which has been consistently reporting on Iran sanctions violations, to assert that its compliance monitoring system is functioning properly. Whether the U.S. Treasury Department launches an additional investigation based on this Reuters report is expected to be a key variable in determining the future regulatory direction for Binance.