Binance helped Iran trade $ 8 billion despite sanctions

Data from cryptocurrency systems shows that cryptocurrency giant Binance has processed $ 8 billion in Iranian transactions since 2018 despite US sanctions aimed at isolating Iran from the global financial system.

A review of data from leading US cryptocurrency analytics firm Chain Analysis showed that nearly all of the money, or around $ 7.8 billion, flowed between Binance and Nobitex, Iran’s largest cryptocurrency exchange. On his site webNobitex offers advice on how to avoid penalties.

Read more: Documents reveal how Tehran escaped US sanctions

Three quarters of the Iranian money that passed through Binance used a relatively unpopular cryptocurrency called Tron, which allows traders to hide their identities. In a post on last year’s blog, Nobitex encouraged customers to use Tron, a mid-tier currency, for making trading in anonymous way to avoid “risking resources due to sanctions”.

The extent of Iranian cryptocurrency flows via Binance has not previously been revealed, nor the fact that they are still in course.

The new disclosure comes as the U.S. Department of Justice conducts an investigation into possible money laundering violations by Binance, which dominates the trillion-dollar cryptocurrency industry and has more than 120 million users. Lawyers and trade sanctions experts said such transactions made the company vulnerable to a violation of the US embargo on doing business with Iran.

Reuters revealed in July that Binance continued to serve customers in Iran and that the company was aware of the demand for its services in the Islamic Republic. This was one of Reuters’ investigations into the record of Binance of compliance issues with financial sector regulation.

Ban Iranian users

In a post on the blog on the same day in to which the investigation was published, Binance said it was complying with the rules of international sanctions against Iran and was blocking all users based there from its platform. “Binance banned Iranian users after the sanctions. Seven of them either missed the ban or found a way around it and in later they were banned anyway, “he said in a tweet from the founder of the company billionaire Zhang Bingchao.

Binance did not answer detailed questions about the new transactions disclosed by Reuters. “Binance.com is not a US company, unlike other platforms that are exposed to the same entities under US sanctions. But we have taken proactive steps to limit our exposure to the Iranian market” by partnering with industry partners and using internal tools, he said. company spokesman Patrick Hillman said in a note.

Binance refuses to disclose details about the location of its platform, Binance.com, or the entity behind it.

And “Nobitex”?

Nobitex did not answer Reuters questions for this report, neither the British Virgin Islands-based Tron Network, nor its founder Justin Sun.

Binance announced in August 2021 that its customers would not be in able to open accounts and use its services without proof of their identity. But it has since processed about $ 1.05 billion in transactions directly from Nubitex and other Iranian companies, according to data from Chain Analysis, which includes November’s quest’year. Since Zhao’s tweet in July, Binance has processed nearly $ 80 million in Iranian agreements.

In the statement, Hellman said the company requires all users to prove their identity, adding that all users “and residents in Iran is forbidden to open or maintain accounts. We constantly update our procedures and technologies as we become aware of new risks and potential vulnerabilities. As a result of these efforts, which included monitoring in real-time transactions. “In coordination with offshore companies, Binance’s exposure to Iran-related entities declined steadily between June and November 2022.”

Data seen by Reuters showed that approximately $ 2.95 billion worth of cryptocurrency has moved directly between Iranian companies and Binance since 2018.

According to the data, another $ 5 billion cryptocurrency was transferred between Iranian companies and Binance via intermediaries. Regulators say these “indirect” flows should serve as a warning to cryptocurrency exchanges, indicating that they could be money laundering or evasion of sanctions. Cryptocurrency users who don’t want to leave a trace usually resort to sophisticated methods to create complex remittance chains.

Criminal penalties

Nobitex advises its four million customers via its website to avoid “direct transfers” of cryptocurrencies between Iranian and foreign platforms to “maintain security”.

In addition to Tron, the rest of the Iranian transactions involved major cryptocurrencies such as Bitcoin, Ether, Tether, XRP, and a smaller currency called Litecoin.

A U.S. Department of Justice investigation focuses on whether Binance has violated U.S. anti-money laundering laws. Three sources familiar with the investigation said the department is also investigating, as part of the case, in ongoing since 2018, due to a possible violation of criminal sanctions by Binance related to Iran. At the end of 2020, the department requested Binance i record of its compliance program, including all documents relating to the transfer of funds in cryptocurrency on the account of persons or entities in countries including Iran.

The United States Department of Justice declined to comment.

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