Home of Lisa's Top Ten, the daily email that brings you the world.
Donate
SUBSCRIBE

Lisa's Top Ten

World’s Largest Crypto Exchange Company Engaged in Transactions in Sanctioned Iran: Report

pinterest.com
pinterest.com

In Britain, the world’s largest crypto exchange company, Binance, has continued to process trades by clients in the Islamic Republic of Iran despite United States sanctions and a company ban on conducting business in the Middle Eastern country, according to investigative outlets. The recent revelation comes as the Biden administration and its officials have been frustrated over the lack of progress in the ongoing nuclear talks with Iran officials, resulting in U.S.  continuing to pressure the regime to return to the 2015 nuclear agreement.

According to reports, in 2018, when the U.S. government under then-President Donald Trump reimposed economic sanctions, Binance informed its traders in Iran that it would no longer conduct transactions and called for them to liquidate their accounts. The economic sanctions the Trump administration reimposed were part of the original 2015 Joint Comprehensive Plan of Action (JCPOA) agreement between Iran and other major Western powers.

However, in recent interviews with various media outlets, several traders of Binance stated that they evaded the ban and continued using their accounts until September 2021. In the interview, the traders revealed that they lost access to their Binance accounts after the exchange announced new actions to tighten its anti-money laundering checks in August 2021. Before this policy, individuals could only trade through Binance by registering with an email address.

When asked by journalists about using Binance, Iranian crypto traders in Iran stated that while there were other alternative crypto exchange companies, none were as good as Binance, given the lack of identity verification. On employment sites like LinkedIn, several other Iranians posted on their profile that they also traded crypto at Binance after the Trump administration placed economic sanctions.

Inside the company, employees knew how popular the exchange was in Iran, with many joking about the growing ranks of Iranian users. On social media outlets like Instagram, employees sent direct messages to each other between 2019 and 2020, sharing data about the company’s activity in Tehran. In response to such actions, Binance stated that it followed all international sanction rules, creating a global compliance task force and using banking-grade methods to prevent sanctioned individuals, governments, and other entities from using its platform.

Some foreign policy and national security experts believe that the recent revelations could face scrutiny from U.S. regulators and members of Congress and prevent the U.S. from squeezing the Iranian economy against the Islamic government. Additionally, some have called for Congress to investigate Binance and small crypto companies that have evaded economic sanctions and engaged in transactions in Iran.

Since Binance’s holding company is in the Cayman Islands, it does not have an official headquarters nor does it provide details about the organization behind its website exchange. It also does not accept customers in America. Given its separate exchange system and authority outside the U.S., experts say that this allows Binance to protect itself from direct American sanctions that ban U.S. firms from doing business in the Islamic Republic. However, others point out that Binance can face secondary sanctions, which aim to prevent foreign firms from doing business with sanctioned organizations or helping the Islamic regime in Iran evade the American trade embargo.

Not only would Binance’s reputation face repercussions from its activities in Iran, but some say that if there were transactions with Iranian clients that dodged the U.S. trade embargo, the crypto entity could face punishment for facilitating sanctionable conduct. According to news outlets like Reuters, there is currently no evidence that sanctioned individuals in Iran have used Binance.

Ever since the creation of the Islamic Republic of Iran in 1979, the U.S. and its allies have imposed crippling economic sanctions on the regime in response to its growing terrorist activities, human rights violations, and nuclear program. Under the 2015 nuclear agreement between Iran and major Western powers, Tehran agreed to curb its atomic activities in exchange for some economic sanctions. However, when reports revealed that the Islamic government was secretly increasing its enrichment of uranium and buildup of centrifuges, this led to criticism over the deal’s inability to deter Iran.

During the Trump administration, then-President Donald Trump and Secretary of State Mike Pompeo revoked the 2015 nuclear agreement, enacted harsh economic sanctions against the Iranian economy, regime officials, and targeted top Iranian officials like IRGC Quds Force Chief Qasem Soleimani. At the time, administration officials from the U.S. Treasury Department stated that any company doing business in Iran would face harsh consequences engaging in commerce with the Iranian economy.

Cut off from international financial services, Iranians have looked to Bitcoin and other uncommon strategies for economic transactions that can avoid international scrutiny, circumvent sanctions, and provide good money. Iranians who owned crypto hedge funds viewed crypto companies like Binance as simple with its customer controls and easy access to creating accounts. When the Trump administration placed sanctions on Iran, Binance customer service representatives sent messages to Iranian users that they could not serve users from Iran, citing recommendations from the United Nations Security Council sanctions lists.

Under the Biden administration, the President and his team have decided to revive the 2015 nuclear agreement with Iran, engaging in negotiations with the regime, offering concessions to get Tehran on board with the deal. Even with all the benefits from the Biden administration, Iranian officials have refused such offers, putting negotiations at a standstill, and generating frustration among American and European negotiators. Despite ongoing talks, the Islamic Republic continues to support terrorist proxies against U.S. and Israeli forces in the Middle East while advancing its nuclear enrichment production to weapons-grade capability.

Total
1
Shares