Exclusive-Crypto exchange Binance helped Iranian firms trade $8 billion despite sanctions

Blockchain data reveals that cryptocurrency firm Binance has handled $8 billion worth of Iranian transactions since 2018 despite U.S. sanctions aimed at cutting off Iran from the world banking system.

According to an analysis of data from renowned U.S. blockchain researcher Chainalysis, almost all the money—roughly $7.8 billion—flowed between Binance and Iran's biggest cryptocurrency exchange, Nobitex. On its website, Nobitex provides instructions on how to avoid punishment.

Three-quarters of the Iranian assets that went via Binance were invested in Tron, a relatively obscure cryptocurrency that allows users to hide their identities. A mid-tier coin called Tron may be used to trade anonymously without "endangering assets owing to penalties," according to a blog post published by Nobitex last year.

It has not previously been published on the magnitude of Binance's Iranian cryptocurrency transfers or the fact that they are still occurring.

The fresh discoveries coincide with the U.S. Justice Department's investigation into alleged money-laundering breaches by Binance, the market leader in the $1 trillion cryptocurrency sector with more than 120 million users. Lawyers and trade-sanctions specialists warned that the transactions placed the corporation at danger of breaking American laws against doing business with Iran.

Reuters reported in July that Binance was still accepting customers from Iran and that the business was aware of the exchange's popularity in the Islamic Republic. A number of Reuters investigations on Binance's problematic past with finance regulatory compliance led to this one. Binance said in a blog post the day after that report was published that it abides by international sanctions regulations on Iran and denies access to the platform to anybody residing there. Changpeng Zhao, the billionaire creator of the exchange, said on Twitter: "Binance banned Iranian users following sanctions, 7 got missed/found a workaround, they were removed later nevertheless."

Regarding the fresh transactions discovered by Reuters, Binance chose not to respond to specific inquiries. Unlike other platforms that have exposure to the same U.S. sanctioned businesses, Binance.com is not a U.S. firm, according to a statement from spokesman Patrick Hillmann. However, by using internal resources and engaging with business partners, we have taken proactive measures to reduce our exposure to the Iranian market.

Binance rejects to provide information on the location or organization that operates its Binance.com exchange.

Nobitex declined to answer inquiries for this story. Additionally, neither did the British Virgin Islands-based Tron Network nor its creator Justin Sun.

Binance said that clients will no longer be able to register for accounts or use its services without identification starting in August 2021. But as of November of this year, according to Chainalysis statistics, the exchange had handled close to $1.05 billion in deals straight from Nobitex and other Iranian exchanges. Iran-related deals on Binance have totaled almost $80 million since Zhao's post in July.

In the Binance statement, Hillmann said that all users must through thorough "Know Your Customer" checks and that "citizens of Iran are not permitted to establish or maintain an account." As we learn about new hazards and possible exposures, we are constantly improving our procedures and technologies. Between June 2021 and November 2022, Binance's exposure to businesses connected to Iran has decreased exponentially as a consequence of these measures, which include real-time transaction monitoring in collaboration with external suppliers.

According to the data examined by Reuters, since 2018, over $2.95 billion in cryptocurrency has flowed directly between Iranian exchanges and Binance.