Crypto Exchange BingX Faces Accusations of Aiding Iranians Evade Sanctions
Summary:
BingX, a top 20 global cryptocurrency exchange, is reportedly aiding Iranian users in bypassing established sanctions. The exchange offers an Iranian version of its website and supports transactions involving the Iranian rial, a currency under US sanction. BingX, also found soliciting Iran-based users through various channels, isn't the only exchange facing similar allegations. Previous reports have highlighted Binance and Poloniex serving restricted Iranian users resulting in multi-million dollar legal settlements.
BingX, a cryptocurrency exchange, is reportedly helping Iranian users bypass established sanctions. The exchange openly displays an Iranian version of its website, and officials have been found making statements in Persian in the exchange's official Telegram group. One of these statements, translated from Persian, indicates that Iranian users face no limitations on BingX—indeed, it's possible even to authenticate their identity using a national card. Interestingly, the exchange offers the option for Iranian rial to Tether (USDT) transactions which are banned under the rules of the United States Treasury Department's Office of Foreign Assets Control (OFAC).
Iran has been encountering a variety of sanctions since 1979, following accusations leveled by the United States and United Nations. The claims involve violations of international law such as illegal seizures of U.S.-owned property, supporting extremist activities, and uranium enrichment for manufacturing nuclear weapons. Iran vehemently denies these allegations.
These sanctions generally impose barriers to Iranian residents using centralized cryptocurrency exchanges, as these platforms face the risk of getting blocked from U.S. and global markets if they affiliate with Iranian users. OFAC warns that Foreign Financial Institutions may face various sanctions if they knowingly engage or facilitate any transactions that involve the purchase or sale of Iranian rials.
On the BingX exchange, however, it seems the Iranian rial—a currency subject to OFAC sanctions—is freely exchangeable for other cryptocurrency. BingX, boasting a trading volume of over $974 million per day according to CoinMarketCap data, ranks among the top 20 cryptocurrency exchanges globally. Registered as a financial services company in Lithuania, the exchange enjoys a license for transacting within the European Union. It also holds a digital currency exchange license in Australia and operates from Singapore.
Given their licensing, BingX, like all global financial institutions, should abide by U.S. OFAC sanctions and any sanctions the Europeans Union or their home countries place on Iran. But, the platform seems to openly invite users based in Iran via their social channels and official website. Previously known as Bingbon prior to November 2021, BingX was established by Josh Lu in 2018 and purports to serve more than 10 million users. The nationality of its current founder is undisclosed.
According to a BingX representative, while Iran is considered a "restricted" country, this doesn't signify a service ban. On the contrary, the exchange continues to advertise its Iranian rial services. BingX—by facilitating the buying and selling of sanctioned Iranian rial and toman through peer-to-peer transactions—isn't the only licensed cryptocurrency exchange skirting sanctions set for Iranian users.
In July 2022, Reuters highlighted that Binance, the world's largest cryptocurrency exchange, was servicing Iranian users. Binance rejected the assertion, insisting on their strict alignment with sanction requirements. However, in November 2023, Binance conceded to a $4.5 billion plea deal with the U.S. Justice Department and the U.S. Treasury after acknowledging insufficiencies in their anti-money laundering policies.
Similarly, in May 2023, Poloniex, another crypto exchange, agreed to a $7.6 million settlement with the OFAC. The settlement was due to their failure in screening users from Crimea, Cuba, Iran, Sudan, and Syria, who had registered before Know Your Customer controls were put in place.
Published At
4/12/2024 11:00:00 PM
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