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Binance has once again captured attention. Former compliance investigators now assert that the exchange purportedly facilitated over $1 billion in transactions associated with violations of Iran sanctions, even while under U.S. oversight following its plea agreement in 2023.
Changpeng Zhao is responding assertively. Rather than outright denying the allegations, he contends that the investigators were dismissed for their inability to prevent the violations, not for bringing them to light.
The situation is now becoming public, potentially reviving regulatory scrutiny just as Binance seeks to stabilize its international operations.
Key Takeaways
- Former investigators claim Binance processed nearly $1 billion in transactions related to Iran following its 2023 plea agreement.
- The staff allege they were terminated in retaliation for identifying and reporting the questionable on-chain activities to management.
- CZ argues that the employees were let go due to incompetence, as they failed to prevent the illicit transactions initially.
What is the $1B Sanctions Breach Allegation?
Five former Binance investigators assert they were dismissed after revealing significant sanctions violations. They allege that wallets linked to Iranian entities, including the exchange Nobitex, moved approximately $1 billion through Binance even after the DOJ settlement in November 2023.
These investigators specialized in chain forensics. They claim that malicious actors employed obfuscation techniques to evade detection by screening systems. When they raised concerns internally, they allege the response was retaliatory rather than corrective.
15% chance binance finally gets taken down
which company are you betting on? pic.twitter.com/PBgQvEPyyB— HYPEconomist (@HYPEconomist) February 23, 2026
Binance remains under a three-year oversight from the DOJ and FinCEN, meaning any compliance failures carry significant consequences.
The Whistleblowers’ Case: Retaliation or Restructuring?
The former employees are portraying this as retaliation against whistleblowers. They argue that once they highlighted the $1 billion exposure, they became problematic for an exchange aiming to demonstrate to regulators that it had rectified its issues.
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BREAKING: Binance FIRED five compliance officers after they discovered over $1,000,000,000 in Tether flowing to Iran-linked terrorism entities, which violates sanctions.
Throwback: In 2023, Binance paid $4.3 billion in fines, the largest in corporate history, after admitting to…— Jacob King (@JacobKinge) February 23, 2026
In their perspective, the concern was not solely about the transactions but also about how Binance managed the discovery. They argue that the exchange prioritized mitigating the fallout over addressing the deficiencies in its screening processes.
They also highlight the magnitude of the transactions as evidence that automated filters were ineffective. If the system failed and those who identified the issue were dismissed, it would undermine internal safeguards.
CZ’s Defense: ‘Fired for Cause’
CZ is countering the claims as he typically does. He asserts that this is not a case of whistleblower retaliation but rather a performance issue. If investigators identified $1 billion in illicit transactions, why were those transactions not intercepted initially?
Binance maintains that the departures were part of a compliance restructuring. The company states it has recruited more capable personnel and cites a 97% reduction in transaction volume related to sanctions between early 2024 and mid-2025 as evidence that reforms are effective. It denies terminating anyone for reporting violations.
The implications are significant. Binance has already incurred $4.3 billion in penalties related to AML and sanctions failures and is currently under DOJ oversight. If regulators determine that the exchange overlooked new violations or retaliated against employees, it could jeopardize that agreement.
Irresponsible and misleading press articles based on anonymous sources (whether including possibly disgruntled ex-employees or otherwise) does injustice to the great work of our more than 1300 compliance staff working tirelessly to uphold global standards.
Facts:
1. Binance…— Richard Teng (@_RichardTeng) February 14, 2026
Everything depends on intent. If the terminations were based on performance, the fallout may be limited. If not, regulatory scrutiny could escalate quickly.
Ultimately, the resolution of this conflict will likely depend on the internal documentation regarding the firings. If the evidence supports CZ’s assertion of incompetence, Binance may proceed without further issues.
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