The cryptocurrency exchange Binance continued to serve customers in Iran, circumventing U.S. sanctions and the ban on doing business in that country. This is indicated by Reuters’ investigation results.
In 2018 the United States reimposed sanctions, suspended under the Iran deal with major powers. In November of the same year, Binance told local traders that it would no longer serve them and urged them to close their accounts.
However, according to Reuters, at least seven Iranian clients continued to use their accounts up to September 2021. To register they only needed an email address. They lost access to the platform only after Binance tightened its anti-money-laundering checks.
“There were several alternatives, but none was as good as Binance. Identity verification wasn’t required, so we all used this exchange,” said Tehran trader Asal Alizadeh, who used the platform for two years until September 2021.
Another eleven people in Iran, in addition to those Reuters spoke to, reported in their LinkedIn profiles that they traded cryptocurrency on Binance after the 2018 ban.
Traders said that Binance attracted them with lax KYC checks, high liquidity and a large number of cryptocurrencies. Some of them easily circumvented restrictions using VPN services.
“Crypto is a good way to bypass sanctions and make money,” said trader Ali, who used Binance for about a year.
He shared with Reuters a chat transcript with the exchange’s support team, which told him that his account had been closed in 2021 in accordance with “the United Nations Security Council’s recommendations”.
Senior executives at the company were aware of the rise in Iranian users, as indicated by messages they exchanged in 2019 and 2020, the agency reports.
“IRAN BOYS,”
Another joked about promoting this fact: “Promote this on Twitter Binance U.S.”
In April 2020, an unnamed senior employee noted in the correspondence that Iranian traders were using Binance, without specifying how he learned this. A compliance document from that same year, reviewed by Reuters, gave Iran the highest risk rating for illicit financing among all countries.
Representatives of the exchange declined to comment.
According to lawyers, the incident could attract the attention of U.S. regulators. Binance’s sprawling structure does not shield it from the risk of secondary sanctions that bar foreign firms from doing business with blacklisted entities. This could not only damage its reputation but also cut the company off from access to the U.S. financial system.
Reuters found no evidence that individuals on the sanctions list used Binance.
In March, Binance said it “strictly adheres to international sanctions.”
The exchange said it was using “bank-grade tools” to prevent evasion of restrictions via its platform.
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