Promises of Reform Collide With Ongoing Allegations Inside Binance
New reports allege Binance allowed risky accounts to trade after its 2023 U.S. plea deal, raising doubts about crypto compliance reforms.
When Binance agreed to a $4.3 billion plea deal with U.S. authorities in November 2023, the message was meant to be definitive. The world’s largest crypto exchange pledged to overhaul its compliance systems, tighten oversight, and finally draw a line under years of regulatory confrontation. Yet new reporting suggests that, behind the scenes, business as usual may have continued for some of the platform’s most troubling accounts.
An investigation published by the Financial Times alleges that Binance allowed a network of high-risk accounts to keep trading long after the plea agreement was signed. According to the findings, 13 flagged accounts collectively moved around $1.7 billion in cryptocurrency, with at least $144 million processed after the date Binance publicly committed to “cleaning house.” Some of the funds were allegedly linked to sanctioned jurisdictions and militant organizations, including Hezbollah and Iran.
The activity described reads less like routine compliance slippage and more like systemic failure. Users reportedly logged in from cities thousands of miles apart within hours, cycled through hundreds of bank accounts, or repeatedly altered their personal details in ways that would typically trigger immediate scrutiny at traditional financial institutions. As the Financial Times noted, standard controls are designed to flag “pass-through behaviour,” where funds exit an account almost as quickly as they arrive, a classic red flag for money laundering.
One case highlighted involves a Venezuelan account holder who allegedly processed more than $170 million in under two years, using nearly 500 different bank accounts to move funds across the Americas. Another account, registered with what investigators described as an unreadable, decades-old ID and mismatched contact details, reportedly received $16 million despite a declared net worth of just $400,000. Portions of these flows were later traced to wallets that Israeli and U.S. authorities would go on to freeze or sanction.
Binance has strongly rejected the implications of the report. Its legal representatives said that “any suggestion that our client has knowingly facilitated bad actors in criminal conduct is baseless,” arguing that the wallets in question were not designated for terrorism financing at the time and that no alerts were raised by major blockchain monitoring tools. The company maintains that it has significantly strengthened its controls since the U.S. settlement.
The timing, however, adds another layer of controversy. In October 2024, former CEO Changpeng Zhao, who had pleaded guilty to violating anti-money-laundering laws, received a presidential pardon from Donald Trump. While Zhao remains barred from executive roles, Binance recently appointed longtime associate He Yi as co-CEO, underscoring how closely the company’s leadership circle still overlaps with its past.
Meanwhile, legal pressure continues to mount. Hundreds of families affected by the October 7, 2023 attacks have filed a lawsuit accusing Binance of enabling militant financing, claims the exchange dismisses as “grotesquely sensationalist.” For regulators and critics, the broader question remains unresolved: whether crypto’s largest platforms can credibly police themselves, or whether the gap between compliance promises and operational reality is still dangerously wide.
