According to a Reuters investigation, Binance, the biggest cryptocurrency exchange in the world, continues to execute customer trades in Iran despite American sanctions and a corporate restriction on operating there. Following the Iran nuclear agreement with major international powers, the United States resumed sanctions against Iran in 2018. These penalties had been lifted three years prior.
Eleven more Iranians who were not questioned by Reuters but were in Iran declined to speak. The traders said that they kept using their Binance accounts up until September of last year, losing access only when the exchange intensified its anti-money laundering procedures a month earlier. Everyone utilized it since identification verification was unnecessary. Asal Alizade, a dealer in Tehran who claimed to have used the exchange for two years till September 2021, said that while there were some alternatives, none of them could compare to Binance in terms of quality.
The business was aware of the exchange’s popularity in Iran. Iran-related inquiries from Reuters went unanswered by Binance. Binance said in a blog post from March that it “follows international sanction guidelines meticulously” and had put together a “global compliance task team” to implement sanctions against Russia and other nations. According to 10 texts senior workers had with one another in 2019 and 2020, which are disclosed here for the first time, they were aware of the exchange’s swelling ranks of Iranian users and made jokes about them.
The Cayman Islands-based parent company of Binance claims it does not have a single headquarters. The organization behind its primary Binance.com exchange, which does not accept consumers from the United States, is not disclosed. Instead, U.S. customers are routed to BinanceUS, a different exchange that is ultimately under the jurisdiction of Changpeng Zhao, the creator of Binance, according to a 2020 regulatory filing. According to seven attorneys and sanctions specialists who spoke to Reuters, American regulators may be interested in the Iranian activity on the exchange.
According to lawyers, this arrangement shields Binance from the direct U.S. sanctions that prevent American companies from conducting business in Iran. Whether sanctioned parties transacted on the platform and whether Iranian clients avoided the U.S. trade embargo as a result of their transactions would determine Binance’s vulnerability. According to Erich Ferrari, the founding partner of the Washington-based legal firm Ferrari & Associates, Binance might be punished for encouraging “sanctionable behavior.”
Even after several senior business executives expressed concerns, Binance continued to conduct lax compliance checks on its users up until last year. Regarding rumors that Binance permitted traders from Iran to transact on the exchange, the U.S. Treasury declined to comment. Cristiano Ronaldo, a soccer player from Portugal, was hired by Binance last month to promote its NFT company. CZ Zhao, the company’s founder, first committed $500 million to Tesla CEO Elon Musk’s proposed acquisition of Twitter, but then backed out of the arrangement.