Binance Under Fire for Serving Iranian Customers Despite Sanctions

Binance Under Fire for Serving Iranian Customers Despite Sanctions

July 14, 2022 0 By Jeanine Sanchez

Despite the international sanctions on Iran, reports say Binance is serving Iranians. Binance is the largest cryptocurrency exchange in the world.

Heavy Criticisms

Reuters has revealed in a recent report that Iranian-based traders still use the exchanger. Binance is said to have Iran on a blacklist. It is one of the countries it should not do business in or with.

The Reuters investigation revealed that the crypto exchange might have deliberately evaded sanctions. The US placed sanctions on Iran in 2018. The recent finding is opposed to Binance claims that it cut off Iran in the same year.

Reuters revealed that Iranian traders kept using Binance till September 2021. That was about the same time when tougher anti-money laundering rules were implemented. The report said up to 11 other people claimed to have been actively on Binance.

Iranians resorted to Binance’s calls that were put in. This followed the US increased economic sanction in 2018. Binance is based in the Cayman Islands, it is, therefore not held by US sanctions against business in Iran.

Albeit, the US-based part of Binance let Iranians bypass the sanctions. It probably has incurred a secondary sanction by conducting business in a sanctioned country.

An Iranian trader supposedly spoke with Reuters in an interview. They said there are alternatives but they are not as good as Binance. 

Former President Donald Trump went back on the deal reached with Iran by his predecessor. Sanctions were swiftly reintroduced against Iran and businesses, including Binance, followed suit.

It happened that users could register with just their email addresses so Iranians continued. They went unnoticed till the firm upgraded its anti-money laundering protocol last August.

The Reuters report further said Iranians could easily bypass the Binance ban with VPNs. It will hide their IP addresses and change their locations on the exchange.

CZ Replies

Binance CEO, Changpeng Zhao, posted a response to the report via his Twitter page. He said Binance has used Reuters’ WoldCheck as one of its KYC tools since 2018. The CEO soon followed up his tweet with another.

He clarified that Binance is not a US firm, nor is it headquartered there. He said the firm only blocked its platform to anyone in Iran based on respect for US laws. Another reason he stated is the recognition of the US in the global economy.

CZ said Binance plans to incorporate a more advanced detection tool. It would help crack down on sanctioned users and regions with advanced masking tools.

Binance allegedly sorted over $2.35 billion in illegal funds between 2017 and last year. The firm has been accused of being a melting pot for fraudsters, hackers, as well as drug traffickers. Binance denied all such allegations.