Key Highlights
- Binance filed a defamation lawsuit against The Wall Street Journal over Iran terror funding allegations.
- The U.S. Department of Justice has reportedly opened a new investigation into Iran-linked crypto flows.
- The case follows weeks of political pressure, Senate inquiries, and compliance scrutiny surrounding the exchange.
Binance, the world’s largest cryptocurrency exchange by trading volume, has filed a formal complaint against The Wall Street Journal, accusing the publication of publishing false and defamatory claims that have caused significant reputational and business harm.
The lawsuit, announced as filed on March 11, targets a February 23 report that alleged the exchange processed more than $1 billion in transactions tied to Iranian entities that reportedly funded militant groups. The article also claimed that Binance dismissed compliance investigators who had flagged suspicious activity.
In a blog post published today, Binance rejected the allegations, saying the article misrepresented the platform’s monitoring systems and internal investigations. However, just hours after the lawsuit became public, the situation escalated further when reports emerged that the DOJ had opened a new investigation into the same transaction flows cited by the WSJ.
Binance Says WSJ Prioritized Clicks Over Accuracy
Dugan Bliss, Binance’s Global Head of Litigation, said the company views the lawsuit as a necessary step to defend itself against misinformation and hold the WSJ accountable.
Bliss stated, “This type of reporting erodes trust in the broader industry and undermines the efforts of those who are committed to protecting users and advancing positive innovation.” He added that Binance takes immense pride in its compliance program and remains committed to upholding the highest standards on behalf of more than 300 million users worldwide.
According to Bliss, the WSJ report triggered reputational damage and led to what Binance described as baseless and unnecessary inquiries from policymakers. The exchange also noted that the WSJ has continued to report what it considers the same false claims even after the initial article, which it said further demonstrates the need for the legal action.
DOJ Reportedly Opens Parallel Investigation
Just hours after the lawsuit was made public, reports surfaced that the U.S. Department of Justice had opened a new probe into whether Iran used crypto networks connected to Binance to bypass American sanctions.
The investigation reportedly focuses on the same transaction flows highlighted in the Wall Street Journal report. Federal investigators are said to be reaching out to individuals with knowledge of the transactions as part of the inquiry.
The parallel developments, a defamation lawsuit and a federal probe centered on the same set of allegations, mark a significant escalation in tensions between the exchange, regulators, and major media outlets.
How the Controversy Started
The dispute traces back to February 23, when both The Wall Street Journal and The New York Times published reports claiming Binance had processed roughly $1.7 billion in transactions linked to sanctioned Iranian entities and Russian shadow fleet operations between 2024 and 2025.
The reports, citing internal documents and anonymous sources, alleged that multiple compliance staff were dismissed after raising concerns about suspicious flows.
Binance CEO Richard Teng publicly rejected the claims at the time, calling them inaccurate and defamatory. He also shared a legal letter demanding a retraction. The exchange followed up with its own compliance defense, stating that sanctions-related exposure on the platform had declined by 96.8%, falling from 0.284% in January 2024 to 0.009% in July 2025.
The exchange also reported that direct exposure to four major Iranian crypto exchanges dropped 97.3%, from $4.19 million in January 2024 to $110,000 in January 2026. Binance said it processed more than 71,000 law enforcement requests globally in 2025 and supported the freezing and recovery of hundreds of millions of dollars linked to illicit activity during the same year.
Political Pressure Builds in Washington
The controversy quickly moved into the political arena. U.S. Senator Richard Blumenthal launched an inquiry into Binance’s sanctions compliance, while a group of 11 Senate Democrats sent letters to the DOJ and the U.S. Department of the Treasury requesting a formal investigation. The lawmakers asked regulators to examine whether the exchange had enabled sanctions evasion through third-party networks, with a response deadline set for March 13.
Binance responded to the Congressional inquiry on March 6, saying the claims were demonstrably false. The company said two entities cited in the allegations, Hexa Whale and Blessed Trust, had only indirect exposure to Iran-linked wallets and were removed from the platform in August 2025 and January 2026, respectively.
More than 1,500 individuals, nearly a quarter of Binance’s global workforce, currently support compliance, investigative, and risk functions at the exchange. This includes specialists trained in sanctions compliance, counter-terrorist financing, financial crime investigations, and on-chain tracing.
Recent Court Victory Adds to Binance’s Legal Defense
Amid the ongoing controversy, Binance also secured a legal win in a separate case. Earlier this month, a Manhattan federal court dismissed a sweeping lawsuit filed by 535 plaintiffs who alleged the exchange helped finance dozens of terrorist attacks between 2017 and 2024. U.S. District Judge Jeannette Vargas ruled that the plaintiffs failed to show Binance had knowingly participated in any terrorist activity.
Binance Founder Changpeng “CZ” Zhao welcomed the ruling, calling the allegations baseless. His attorney, Teresa Goody Guillén, said the decision reflected the court’s recognition that the case lacked credibility.
The Bigger Picture
The defamation lawsuit arrives at a complex moment for Binance.
On one hand, the dismissal of terrorism-related litigation and the October 2025 presidential pardon granted to Changpeng Zhao by U.S. President Donald Trump have removed significant legal risks for the exchange. Binance currently holds regulatory approvals and licenses in more than 20 jurisdictions and is the first cryptocurrency exchange to secure full authorization under the Financial Services Regulatory Authority of the Abu Dhabi Global Market.
On the other hand, the reported DOJ probe could reopen scrutiny into whether crypto infrastructure linked to Binance was used to bypass international sanctions. Political tensions have also intensified as lawmakers highlighted the exchange’s connections to World Liberty Financial, a firm associated with Trump’s financial network. Reports note that Binance holds a large portion of the supply of the firm’s stablecoin and that a $2 billion investment from Abu Dhabi-based MGX has further complicated the political backdrop.
A High-Stakes Legal Strategy
Suing a major media outlet for defamation while simultaneously facing a federal investigation over the same allegations is an unusual legal move.
If the DOJ investigation validates elements of the WSJ’s reporting, Binance’s defamation case could become significantly harder to sustain. However, if investigators fail to substantiate the claims, the exchange could use the lawsuit to argue that the reports caused unwarranted damage to its reputation.
Binance said it will continue to strengthen its compliance program, cooperate with law enforcement, engage constructively with regulators, and correct the record when false statements cause harm.
Either outcome is likely to shape the next phase of regulatory scrutiny surrounding the global crypto industry and the future of the world’s largest cryptocurrency exchange.
Also Read: Is CZ Richer Than Bill Gates? Binance Founder Rejects Forbes Ranking
