Iranians Evade Trade Embargoes Through Binance – Report


The world’s largest cryptocurrency exchange Binance is likely to face sanctions following a Reuters report that it continues to process transactions for Iranians after the US embargo. The United States earlier placed Iran on a ban warning financial institutions to desist from engaging Iran in trade. 

Earlier in 2018, the United States reinforced Iran’s sanctions that were initially imposed prior to its nuclear deal with the world authorities back in 2015. Binance made efforts to enforce the ban that year and informed Iranians that they could no longer trade on the platform. They were in turn advised to liquidate their accounts and withdraw all of their assets. 

Despite its efforts, seven Iranians admitted to having skirted the bans using the crypto exchange. They maintained that their Binance account had been active since. 

Their accounts only got deactivated after Binance enforced its anti-monetary laundering (AML) scheme and its know-your-customers (KYC) procedures. More citizens and residents of Iran also claimed to have used the exchange since 2018.

Before the AML and KYC schemes were implemented, the Iranians could trade on their Binance account by using only an email address. Based on information obtained from one of the Iranian traders, Asal Alizade, no identity verification was required from the users at the time. 

Alizade acknowledged the availability of other exchanges but said Binance was preferred above them all. The absence of an identity verification process made it easier for them to use the trading platform.  

Binance Says It Was Fully Complaint

Binance however, does not have any headquarters but operates from Cayman island. Therefore is not subjected to uphold sanctions issued by the US and its entities on Iran. 

Meanwhile, the United States-based Binance subdivision dubbed Binance.US faces the possibility of being sanctioned. This is entirely on the basis that Binance U.S provided a sanctioned country with a means to evade trade embargoes.

Binance responded to the accusations by saying that its sanctions in Iran program is “fully compliant with all international financial sanctions, including blocking platform access to users in Iran, North Korea, among many others.” 

The exchange declared that detection tools for identifying sanctioned countries have been put in place. According to Binance’s response, no sanctioned country can bypass this, not even with VPNs and IP address blockers.

This report is the latest claim that Reuters will be making on the exchange, which has accused the exchange of facilitating money laundering activities back in June, a claim the exchange also refuted.

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