Reuters published an investigation on the principles of the work of the largest crypto exchange on the planet Binance with citizens of Iran after the imposition of severe sanctions against the Islamic Republic by the UN, the United States and other states in 2018. The publication found at least seven traders from Iran who continued to trade through Binance until September 2021, when the site tightened its anti-money laundering rules.
“We had other alternatives, but none of them were as convenient as Binance. Then they did not require verification, so we widely used it,” Asal Alizadeh, a trader from Tehran, told the agency.
The agency also found profiles of professional traders on LinkedIn who admitted on their pages that they traded cryptocurrencies in Iran through Binance after the ban was introduced in 2018, they refused to answer questions from the publication. The growth of the Iranian audience in 2018-2021 was also known within the company. Reuters claims that inside the company they joked that the exchange's app ratings are growing thanks to Iranian users.
“Cryptocurrency is a great way to get around the sanctions and make good money,” trader Ali, who used the services of the crypto exchange for about a year after the imposition of sanctions, told the publication.
He also showed the publication correspondence with the support of Binance, which ultimately closed his account based on sanctions from the UN. Reuters cites an excerpt from a letter in which the employees responsible for the Binance Instagram profile called the “Iranian boys” actively liking the posts of the crypto site. Officially, representatives of Binance refused to comment on the information about the circumvention of sanctions. Lawyers, on the other hand, see in the actions of the trading platform an invoice for litigation against the company.
At the same time, they admit that the hidden management structure with the registration of the parent company in the Cayman Islands could formally allow the company to continue working with Iranian citizens through a special "daughter". However, in this case, the parent structure of Binance may fall under secondary sanctions from the US, which will deprive the world's largest crypto exchange of access to the US market.
The situation with the implementation of the sanctions regime for the largest crypto platform is especially relevant in the context of bans against Russia. At the moment, Russian users are not prohibited from using the trading platform, however, due to EU restrictions, Russian citizens are not allowed to store more than €10,000 on Binance. Possible proceedings with the US authorities may affect the prospects for the implementation of current decisions in relation to the Russians.