Binance Accused of Helping Iranian Exchange Bypass Sanctions to the Tune of $8B

Binance may have breached money-laundering regulations after data by Chainalysis showed that the world’s biggest crypto exchange has processed around $8 billion in crypto transactions with US-sanctioned Iran. Nearly all of the funds have been traded between Binance and Iran’s biggest crypto bourse, Nobitex.

Binance Traded $7.8B in Crypto Funds With Iranian Exchange Nobitex

Binance handled around $8 billion in crypto transactions with Iran since 2018, according to blockchain research firm Chainalysis. Almost all of those funds, roughly $7.8 billion, have been exchanged between Binance and Nobitex, the largest crypto exchange in Iran.

Data shows that around 75% of the Iranian crypto funds that flowed through Binance were traded in TRON cryptocurrency, which allows users to hide their identities. In 2021, Nobitex promoted TRON to its clients, encouraging them to use it in trading without “endangering assets due to sanctions.”

The report comes amid a probe by the U.S. Justice Department into a potential breach of money-laundering laws by Binance. The unveiled transaction data could mean that Binance has potentially violated US sanctions, which ban US companies from working with Iran.

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Binance at Risk of Breaking Secondary US Sanctions

Earlier this year, Reuters reported that Binance continued providing services to clients in Iran, marking one of the multiple investigations into the crypto exchange’s controversial history with regulatory compliance. Binance opposed the reports, with its CEO Changpeng Zhao saying it “banned Iranian users after sanctions, 7 got missed/found a workaround, they were banned later anyways.”

Regarding the newly-revealed data, Binance’s spokesperson Patrick Hillmann said Binance “is not a U.S. company, unlike other platforms that have exposure to these same U.S. sanctioned entities. However, we have taken proactive steps to limit our exposure to the Iranian marketplace.”

In 2018, former US President Donald Trump reintroduced sanctions on Iran that had been previously frozen as a part of Iran’s nuclear deal. In July 2022, the US imposed new sanctions against Iran’s oil companies, with the Western Asian country authorizing local businesses to use cryptocurrencies for imports just a month later. Iran made its first-ever import of goods using crypto in August, worth around $10 million, but has also reminded its citizens that crypto trading remains banned inside the country.

Sanctions experts said that the revealed transactions between Binance and Iran put the crypto exchange at risk of violating “secondary” US sanctions, which aim to prevent non-US businesses from collaborating with sanctioned parties. These secondary sanctions could reduce a company’s access to the American financial system.

Do you think Binance could face serious penalties following new Iran-related transaction data? Let us know in the comments below.