Bad spotlight… The biggest crypto exchange on the block could be in for some US regulatory scrutiny. Reuters reported that Binance allowed Iranians to trade on its platform, despite 2018 US sanctions and an internal company ban. The sanctions were designed to curb money movement for Iran’s nuclear program and financial support for its proxy states in the region. Human-rights activists said they hurt ordinary Iranians.
- In 2019 and 2020: Binance employees reportedly internally celebrated their Iranian user base. Iranians said they liked the exchange because until mid-2021 all you needed to trade was an email address.
- Last year: The blockchain behemoth, which claims 120M users, tightened its anti-money laundering — booting Iranian customers in the process.
- Now: It's unclear what consequences Binance might face (if any) since its main exchange is not a US company.
Bad timing… Being accused of letting customers evade sanctions is never a great look, and it follows increased global calls for crypto regulation. The European Central Bank is pushing for stablecoin regs, and last week the US Treasury said governments need to come together to make it harder to launder with crypto.
Crypto’s big value prop is double-sided… It's supposed to be permissionless: traders don't need a third party (like a bank) to approve transactions. But not everyone's a fan: regulators highlight this feature as a global financial risk that can empower criminals and sanctioned countries. When industry titans like Binance make headlines for not playing by the rules, tougher regulations likely aren’t far behind.