A Reuters investigation found that Binance continued to operate in Iran despite US sanctions.
The Block was told by a Binance spokesperson that compliance and regulatory programs have been “our primary focus for most of our company’s existence.”
The Block also learned that the sanctions program is fully compliant with all international financial sanction, including those that block access to Iran and North Korea users.
According to a report by Reuters on Monday, Binance, a crypto exchange giant, continued to serve clients and process transactions by Iranians, despite US sanctions.
The ban was imposed in 2018 after the US reinstated sanctions that were previously suspended because of Iran’s nuclear agreement with other major powers. Binance had stated in November 2018 it would stop trading and asked its users to close their accounts.
Interviews with seven traders were used in the Reuters investigation. They said that they had avoided the ban and maintained access to their accounts until September 2013. It also claims that 11 LinkedIn profiles of people who traded after the ban was implemented revealed that they were among those found. Reuters claims that employees joked and knew about Iranian users.
Changpeng Zhao, founder and CEO, tweeted this morning: “Binance uses Reuters WorldCheck since 2018 as one of its KYC [know your Customer] verification tools.”
According to Reuters, bans can be easily avoided using virtual private networks (VPNs). Binance even endorsed the technology in a blog article entitled “A Beginners Guide To VPNs.”
These claims are about Binance, the entity whose holding firm is located in the Cayman Islands and not the US entity of company Binance.US. Zhao controls both entities.
Reuters also noted that many experts who were consulted believed Iran’s continued activity would attract attention from the US regulators. Although the structure of the company means that it is not subject to US scrutiny in the first instance; however, “secondary sanctions” could apply to a company to prevent them from having access to the US financial systems.
Iran has had a volatile relationship with crypto. In June, also cut electricity to all 118 licensed crypto mining centers. This was due to increased energy demand.
The Block was told by a Binance spokesperson that compliance and regulatory programs have been “our primary focus for a large portion of our company’s existence”. The Block also learned that the sanctions program is fully compliant with all international financial sanction, including those that block access to Iran and North Korea users. They also said that they have advanced detection tools that allow further crackdowns on tech like VPNs.
