Binance Helped Iranian Companies Trading $8 Billion Despite Sanctions

Cryptocurrency giant Binance has processed $8 billion worth of Iranian transactions since 2018 despite US sanctions aimed at cutting Iran off from the global financial system, blockchain data shows.

Nearly all of the funds, about $7.8 billion, flowed between Binance and Iran’s largest cryptocurrency platform Nobitex, according to data from Chainalysis. Nobitex offers guidance on its website on how to circumvent sanctions.

About 25% of Iranian funds that passed through Binance were in a low-exposure cryptocurrency called Tron, which offers the option to hide identity.

Last year, Nobitex encouraged clients to use Tron to trade anonymously without “putting assets at risk due to sanctions”.

The findings come as the US Department of Justice investigates possible violations of money laundering rules by Binance, which dominates the $1 trillion cryptocurrency industry and more than 120 million users.

Binance did not respond to inquiries about the transactions. In a statement, spokesperson Patrick Hillmann said: “Binance is not a US company, unlike other platforms that have exposure to US-sanctioned entities. However, we have taken proactive steps to limit our exposure to the Iranian market.”

Binance refuses to provide details on the location of its headquarters or the entity behind its Binance.com exchange.

Nobitex did not respond to Reuters questions. Neither does Tron Network, based in the British Virgin Islands.

Last year, Binance announced that customers would no longer be able to open accounts and use services anonymously. But since then, the exchange has processed $1 billion worth of trades directly from Nobitex and other Iranian exchanges, according to Chainalysis, going through November this year.

Data reviewed by Reuters shows that about $2.95 billion worth of cryptocurrencies have moved directly between Iranian exchanges and Binance since 2018. Another $5 billion has been moved between Iranian exchanges and Binance through layers. of intermediaries.

Nobitex advises its 4 million customers to avoid direct transfer of cryptocurrencies between Iranian and foreign cryptocurrency platforms to maintain security.

Aside from Tron, the rest of Iranian transactions were in major cryptocurrencies bitcoin, ether, tether, XRP and litecoin.

Binance is the biggest marketplace for Tron trading.

Tron data points to more than 1.15 million direct transfers between Binance and Nobitex since April 2020, when the first cryptocurrency flows were recorded. The volume of Iranian transactions flowing through Binance is much higher than through any other exchange.

Lawyers and sanctions experts said the Iranian transactions put Binance at risk of “secondary” sanctions, designed to prevent foreign companies from doing business with sanctioned entities or helping Iranians escape the US embargo. Sanctions can prevent a company from accessing the US financial system.

Binance says it does not accept US customers. North American customers are directed to a separate exchange called Binance.US, run by a company that since 2019 has been registered with the Treasury as a financial services company.

The vast majority of the $8 billion worth of Iranian cryptocurrency transactions identified by Reuters involved major exchange Binance. But Binance.US also processed $1.5 million worth of cryptocurrency transactions from Iranian exchanges Nobitex, Wallex and Tether Land.

US entities that violate sanctions on Iran can face fines of up to $1 million per violation. And people involved can face imprisonment of up to 20 years.

Nobitex, the largest Iranian exchange, launched in 2017 and said it serves as a “safe bridge between 3.5 million Iranians and the cryptocurrency world.”

The platform says it processes 70% of Iranian cryptocurrency transactions. The exchange has recommended that its customers use Binance on its website and social media channels.

Nobitex customers started moving bitcoin through Binance in 2018, according to Chainalysis. Last month, $20 million worth of Tron flowed directly between Binance and Nobitex.