Binance is facing a U.S. federal investigation into whether it knowingly allowed users to bypass sanctions targeting Iran, Bloomberg reported Tuesday, citing people familiar with the matter.

The case is being handled by the U.S. Attorney’s Office in Manhattan, which is examining whether the crypto exchange failed to block certain trading activity linked to Iran that could have violated U.S. sanctions, according to the sources, who asked not to be identified.

The Justice Department’s criminal division in Washington, D.C., is also involved in the investigation. One source said prosecutors are seeking to determine whether Binance allowed trades to continue despite knowing that the activity could run afoul of U.S. sanctions laws.

Binance said it maintains a strict sanctions-compliance policy and works with law enforcement agencies.

“We maintain a zero-tolerance policy for sanctions violations,” a company spokesperson said by email. “We fully cooperate with law enforcement, and we remain committed to rooting out and shutting down bad actors.”

The Justice Department and the Manhattan U.S. Attorney’s Office did not immediately respond to CoinDesk’s requests for comment.

The investigation comes after Binance previously faced major scrutiny from U.S. authorities. In 2023, the exchange pleaded guilty to banking compliance violations and agreed to pay $4.3 billion in fines.

Since then, Binance has emphasized its compliance infrastructure and cooperation with regulators. In a February blog post, the company said more than 1,500 employees, or about 25% of its global workforce, were engaged in compliance work.

Binance also sued Dow Jones for defamation in March after The Wall Street Journal reported that the Justice Department was examining whether Iran had used Binance to transfer funds in violation of U.S. sanctions.

Richard Teng, Binance’s co-CEO, criticized the report, accusing the Wall Street Journal of “inaccurate reporting about our compliance program.”

In April, The New York Times reported that Binance had introduced additional restrictions for law enforcement officials in several countries seeking user information. The changes reportedly made it more difficult for authorities to track scammers and investigate money laundering.

Binance has consistently said it has never permitted transactions involving sanctioned individuals and has pledged to continue assisting authorities.

Meanwhile, U.S. Senator Richard Blumenthal, a Democrat on the Senate Homeland Security Committee, launched a separate investigation in February into allegations involving $1.7 billion in sanctions violations at Binance. The exchange said its review found no evidence supporting the allegations.