Crypto exchange Binance helped Iran trade $8 billion despite sanctions

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(Kitco News) – Binance, the world’s largest crypto exchange, has processed transactions from Iran worth more than $8 billion, enabling the country to skirt US sanctions since 2018, Reuters reported on Friday.

Iran’s largest crypto exchange, Nobitex, which has over four million customers, channeled $7.8 billion through Binance, according to an analysis of blockchain data by leading US research firm Chainalysis. Nobitex even explains on its website how to use specific tokens and exchanges to bypass sanctions.

Seventy-five percent of the funds processed through Binance from Iran were in the form of a relatively unknown cryptocurrency called Tron, which allows users to hide their identity. In a blog post last year, Nobitex encouraged clients to use Tron to preserve their anonymity and avoid funds being seized due to sanctions. The Nobitex website also advises customers to use intermediaries between its platform and foreign crypto platforms to avoid being detected or flagged.

Binance, which has over 120 million users, has denied and downplayed previous reports of its links with Iran. On July 11, the day after Reuters published an article claiming that Binance had continued to serve Iran-based clients despite sanctions, Chagri Poyraz, the company’s head of sanctions, posted a lengthy statement on their blog claiming that the company had “blocked all access”. to our platform” to everyone in Iran. “We have a responsibility as market leaders to set an example for other exchanges when it comes to following international law, and so we do,” Poyraz wrote.

On the same day, Binance’s founder Changpeng Zhao tweeted a dismissive critique of the Reuters story:

In the July blog statement and in subsequent communications, Binance has also argued that it is not a US company and does not have the same obligations regarding sanctions that US exchanges would have. However, they have declined to say which entity owns the online exchange, and in which country it is based.

The blockchain data analyzed by Chainalysis shows that since 2018, $2.95 billion in crypto has moved directly between Iranian exchanges and Binance, and another $5 billion in crypto transactions were made through intermediaries. This makes Binance well on its way to being the number one exchange for Nobitex customers, with Seychelles-based KuCoin in second place, processing $820 million in direct and indirect transactions combined.

According to the data, since August 2021, when Binance announced that customers had to identify themselves to open accounts and use the exchange, the company has processed over $1 billion in transactions directly from Nobitex and other exchanges based in Iran. Since Zhao’s tweet in July this year, Binance has processed an additional $80 million in transactions from Iran.

The US Treasury Department, which is responsible for sanctions against Iran, has yet to comment on the revelations, but legal experts believe Binance could be in violation of the sanctions regime, especially if it is found to have used a “nexus” to the US for the transactions.