Binance Accused Of Allowing Iran Users Despite U.S. Sanctions

According to a Reuters investigation, Binance, the largest cryptocurrency exchange, allegedly let users in Iran trade. Furthermore, the investigation discovered that the trade had evaded American restrictions made in 2018. 

This contradicts Binance’s declarations that it stopped serving Iranian customers in November 2018. Also, Binance’s CEO stated that the company was unaware as these users were using VPNs. 

These VPNs allowed the Iranian traders to bypass geolocation blocking. As a result, they must have traded on the platform undetected for 3 years. 

Iranian Traders Were Able To Bypass Binance Verification Process

Reuters reported that it had interviewed Iranian traders who allegedly evaded the sanction. They continued using the Binance exchange to do business.

According to Reuters, Iranian traders used Binance from 2018 until September 2021. They could no longer use it after September when more robust anti-money laundering (AML) regulations became effective. 

Also, Reuters reported that eleven other people asserted to have been regular traders on Binance. Furthermore, a Tehran trader, Asal Alizade, told Reuters there were various options besides Binance.

However, none of them could compare to Binance. Alizade said that is why everyone utilized it since identification verification was unnecessary.

Furthermore, Reuters claim at least three top Binance officials were aware. Moreover, the exchange is currently the subject of a U.S. probe concerning Russian sanctions.

As a result, the company might come under intense heat from U.S. authorities. Presently, there are claims that Binance did not heed to Russian sanctions.

Binance CEO Argues The Iranians Used VPN 

Responding to the news, Changpeng Zhao, CEO of Binance, posted on Twitter that:

“Binance has been utilizing Reuters WorldCheck among the KYC verification methods since 2018. Also, the company has been upholding the AML guidelines in America.”

Later, the executive added that although Binance is not a U.S. firm, it had followed its regulations. He stated that the platform restricted Iranians from using Binance immediately after the sanctions.

Also, Binance had installed more advanced complicated detection technologies. This would allow it to clamp down on users in sanctioned locations with access to sophisticated masking methods.

However, Binance suggests that traders may have used software such as a VPN to avoid monitoring. The result of this tech is the ability to overcome geolocation blocking.

“We are continuously attempting to identify customers based on several variables such as user behavior rather than just geography. Unfortunately, people pass through the cracks for us, as they do for every other firm,” CZ concluded.