Binance Facilitates Iranian Crypto Transactions, Binance Boss Not Afraid of US Sanctions Rules?

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Binance, the world's largest crypto exchange, has processed transactions with Iran worth US$8 billion since 2018. Whereas the United States has long boycotted Iran from the global financial system through sanctions. If proven, Binance and its founders could be subject to legal snares like any other infringing corporate entity.

Nearly all of the transaction funds, some $7.8 billion, flowed between Binance and Nobitex, according to data from the company Chainalysis.

75 percent of transactions from Iran that Binance processes use the once popular cryptocurrency, Tron (TRX). Crypto is considered effective to disguise transactions as well as the identity of traders.

This is supported by the fact that crypto flows from Iran via Binance were not previously reported.

Nobitex encourages its clients to use Tron in order to be able to transact anonymously without having to endanger their assets due to sanctions from the United States.

Recent reports suggest that the US Department of Justice is investigating money laundering by Binance, which dominates the crypto industry with $1 trillion in assets, and more than 120 million users.

Transactions with clients from Iran will put the company at risk if this is still the case and is proven to have done so. However, based on the findings of Reuters, the transaction was still carried out until July 2022.

This is one of Binance's many problems with financial regulatory compliance. However, Binance itself responded that they had closed access to anyone from Iran.

"Binance closed user accounts from Iran after the sanctions decision, 7 users who were caught later were also immediately closed," Zhao said on his Twitter.

However, Binance did not answer questions in detail about the Reuters findings.

“That the Binance company is not part of a US corporate entity, so they don't have to follow the sanctions rules from America. However, we are taking proactive steps to reduce transactions with traders from Iran," said Patrick Hillman, a spokesman for Binance (7/11/2022).

Even Nobitex itself did not respond to the Reuters report. The same thing was done by Tron Network based in England, Virgin Island and its founder Justin Sun.

In August 2021, Binance announced identification rules in order to access its accounts. However, since the policy was implemented, large transactions worth US $ 1.05 billion from Nobitex still exist.

“Binance made a clear statement by implementing a know-how for every user and prohibiting Iranian residents from having accounts on Binance,” Hillman said.

Through this policy, transactions between Binance and users from Iran are drastically reduced.

"Nevertheless, the total transactions made by Binance from Iran have reached US$2.95 billion since 2018," quoted by Reuters.

Sanction Risk and Relationship with Binance

Binance has grown rapidly since its release in 2017. The company also invested $500 million into Twitter via Tesla boss Elon Musk in the acquisition process.

However, the United States Department of Justice is focusing on investigating whether Binance violated the Money Laundering Act or not.

Sanctions were imposed on Iran in 2018 for violating the nuclear deal with world countries.

The West and the United Nations have targeted Tehran since 1979 with sanctions against its nuclear program, human rights violations and aid to terrorists.

British Standard Chartered Bank in 2019, was found guilty of providing financial services to the Iranian public. As a result, the bank had to pay a fine of up to US$930 million.

French bank BNP Paribas was also found guilty of conducting transactions with Iran and had to pay a fine of US$8.9 billion in 2014.

If Binance is found to have violated the Money Laundering Act, the company could be fined up to US$1 million per violation. In fact, those found to be involved will be sentenced to a maximum prison sentence of 20 years.

In October 2022, Bittrex was fined US$24 million for violating sanctions against Iran by conducting crypto transactions with a value exceeding US$260 million.

If this Binance Iran transaction is proven, then Binance, Changpeng Zhao and other parties found guilty will face very severe penalties.

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