(Kitco News) - Binance, the world’s largest crypto exchange, has been processing transactions from Iran worth over $8 billion, enabling the country to skirt U.S. 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 from leading U.S. research firm Chainalysis. Nobitex even explains on its website how to use specific tokens and exchanges to circumvent sanctions.
Seventy-five percent of the funds that were processed through Binance from Iran were in the form of a relatively unknown cryptocurrency called Tron, which gives users the option to conceal 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 minimized previous reports of their dealings 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 which claimed the company had “blocked all access to our platform” to anyone in Iran. “We have a responsibility as market leaders to be an example for other exchanges when it comes to following international law, and thus we do,” Poyraz wrote.
The same day, Binance’s founder Changpeng Zhao tweeted a dismissive critique of the Reuters story:
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In the July blog statement and in subsequent communications, Binance has also claimed they are not a U.S. company and do not have the same obligations with regard to sanctions that U.S. exchanges would have. However, they have declined to say which entity does own the online exchange, and in which country it is based.
The blockchain data analyzed by Chainalysis show that since 2018, $2.95 billion in crypto moved directly between Iranian exchanges and Binance, and an additional $5 billion in crypto transactions were done through intermediaries. This makes Binance far and away 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 would need to identify themselves in order 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 of this year, Binance has processed an additional $80 million in transactions from Iran.
The U.S. Treasury Department, which is responsible for sanctions on Iran, has yet to comment on the revelations, but legal experts believe Binance could be in violation of the sanctions regime, especially if they are found to have employed a ‘nexus’ to the U.S. for the transactions.
