Binance Allegedly Allowed Suspicious Accounts Despite 2023 US Plea Agreement

Key Points:

• Despite a landmark 2023 plea deal, Binance allegedly allowed hundreds of millions in suspicious cryptocurrency to flow through red-flagged accounts.
• Internal documents link active accounts to networks accused of moving funds for sanctioned groups, including Iran and Lebanon’s Hezbollah.
• Reports of “physically impossible” login activity and failed identity checks have intensified pressure on the exchange’s court-mandated monitoring.

According to a Monday report from the Financial Times, Binance failed to prevent hundreds of millions of dollars in cryptocurrency from flowing through suspicious user accounts even after pledging to tighten controls under a landmark $4.3 billion U.S. criminal settlement” in 2023.

The investigation, which cites leaked internal documents, reveals a persistent gap between the exchange’s public commitments and its operational reality. 

While the company promised to strengthen its anti-money laundering (AML) protocols, the report suggests that accounts showing multiple red flags continued to trade freely on the platform.

High-Value Suspicion and Red Flags

The investigation highlights a staggering lack of oversight for high-volume traders. Some users reportedly moved eight- and nine-figure sums through their accounts in patterns that experts suggest would typically trigger immediate freezes or investigations at any regulated bank.

The Financial Times detailed one specific account linked to a resident of a Venezuelan slum. This user processed approximately $93 million between 2021 and 2025. Investigations traced a portion of these funds to a network later accused by U.S. authorities of covertly moving money for Iran and Lebanon’s Hezbollah.

This revelation is particularly damaging because several of the accounts reviewed continued operating well after Binance’s November 2023 plea agreement. At that time, the exchange promised to strengthen its anti-money laundering transaction monitoring and sanctions controls as part of its court-mandated remediation.

The $4.3 Billion Compromise

In November 2023, Binance reached a historic settlement with the U.S. Department of Justice, the Treasury, and the CFTC. The exchange pleaded guilty to violating the Bank Secrecy Act and agreed to pay $4.3 billion in penalties.

As part of this deal, founder Changpeng “CZ” Zhao stepped down and served a four-month prison sentence.

An important factor of this agreement was the appointment of an independent compliance monitor.

However, as reported by Finance Magnates, several of the suspicious accounts reviewed by the FT continued operating long after the monitors were in place. This has raised urgent questions regarding the effectiveness of the current oversight.

A Shifting Regulatory Climate

The timing of these revelations is significant. In late 2025, the cryptocurrency industry has seen a shift in political winds. President Donald Trump recently issued a pardon for Changpeng Zhao, and there have been reports of the Justice Department considering the removal of the independent monitor.

“The incentive was: keep your CEO out of jail,” Jessica Davis, a former Canadian intelligence official, told the Financial Times. She noted that the sheer volume of money made on these platforms often outweighs the threat of fines.

The Watchdogs in the Room

The persistent issues come as a surprise given the “financial colonoscopy” the exchange is currently undergoing. As part of its 2023 plea, Binance was assigned two independent monitors. 

As reported by DL News, Frances McLeod of the Forensic Risk Alliance (FRA) was selected by the DOJ to scrutinize the company’s internal controls. Simultaneously, Sharon Cohen Levin of Sullivan & Cromwell was appointed to oversee sanctions compliance.

These monitors have unprecedented access to Binance’s books, personnel, and daily transactions. However, the FT investigation suggests that many of the flagged accounts were active while these monitors were already in place. 

This has led to intense debate among regulators about whether the monitorship is providing a true check on the exchange or merely a veneer of legitimacy.