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Binance Continued Iranian Operations Despite Sanctions, Reuters Says
A Reuters investigation says Binance continued to operate in Iran after 2018, despite US sanctions. Binance did not immediately respond to The Block’s requests for comment.
Kabir V.
12:18 11th Jul, 2022
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Crypto exchange giant Binance continued to serve clients and process trades by people based in Iran, irregardless of US sanctions and a ban on doing business there, according to a report on Monday by Reuters.

The ban dates back to 2018, when the US reimposed sanctions that had been suspended due to Iran's nuclear deal with other major powers. Binance had said in November 2018 that it would cease trading and had asked users to liquidate their accounts.

The Reuters investigation cites interviews with seven traders who said they avoided this ban, and continued to have access until September last year. It also says it found 11 people whose LinkedIn profiles say they traded after the ban was enacted. In addition to these details, Reuters says employees knew and joked about the tranche of Iranian users.

Binance did not immediately respond to The Block's requests for comment on the investigation, however founder and CEO Changpeng Zhao tweeted: "Binance has been using Reuters WorldCheck as one of the KYC [know your customer] verification tools since 2018."

The Reuters report states that people easily avoided bans via virtual private networks (VPNs) and that the tech was even endorsed by Binance in a blog post called "A Beginners Guide to VPNs."

The claims relate to Binance, the entity whose holding company is based in the Cayman Islands, rather than the US entity of the company, which calls itself Binance.US. Both entities are controlled by Zhao.

The Reuters report also notes that several experts who were consulted believe continued activity in Iran may garner interest from US regulators. The structure of the business means it is protected from US scrutiny in the first instance, but could be subject to so-called "secondary sanctions" which could mean a company is cut off from access to the US financial system.

Iran has so far had a tempestuous relationship with crypto, having also cut electric power to all 118 legal crypto mining centers in June. The move came as the country faced increased energy demand.

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