Binance Asks Iranian Traders to Withdraw Crypto Assets in Move to Comply with US Sanctions

In a move to comply with the renewed US sanctions on Iran declared on November 5, leading cryptocurrency exchange Binance has called on its Iranian investors to withdraw all of their assets from the exchange.

According to local sources, Iranian investors have been receiving emails which read, “If you have an account with Binance and fall into that [sanctions] category, please withdraw your assets from Binance as soon as possible.”

The Malta-based exchange had reportedly started closing down accounts of users who provided Iranian passports as part of the know-your-customer (KYC) process. The renewed US sanctions on Iran had triggered the process with the exchange sending warnings to accounts connected to Iranian IP addresses.

Earlier, BitMex and Bittrex had also banned Iranian users.

On this, John Collins, a partner at the FS Vector consulting firm in Washington, D.C., and former head of policy at Coinbase commented, “It would be difficult [for the exchanges] to serve users in these jurisdictions if they want to serve American citizens. It’s logical to say that many companies are looking to the States right now and adapting to the U.S. regulation.”

Following the World Mining Summit in Iran, many people have shown interest in the burgeoning cryptocurrency industry in the country and its associated processes.

The limitations on the range of exchange options have, however, not dampened the crypto fever among Iranians.

Nima Dehqan, a researcher at the Tehran-based blockchain project Areatak, informs that crypto investors and enthusiasts in Iran have now come together—like never before and are creating local businesses and support systems to trade their cryptocurrencies. Some vendors have even set up physical shops and conduct traditional KYC. “It’s a bit of closer-knit community in Iran,” he said.

Moreover, a few crypto enthusiasts are also developing minor mining operations instead of relying on external platforms. Dehqan added,

“The sanctions don’t have much effect on mining bitcoin. It’s actually profitable in Iran, compared to other countries.”

An infinite number of people from various cities have come to Tehran to procure mining devices. Mahmoud Eskandari, a Binance user and blockchain developer in Tehran, says, “My friend sells Antminers and mining devices in Tehran. He sold about 100 devices in the past month.”

In Iran, electricity is quite cheap as compared to other countries. This is a big reason behind people opting for crypto mining by themselves. Interestingly, cryptocurrency mining in Iran requires a quarter of the electricity costs, less than a single cent per kilowatt hour, than mining in most industrialized countries.

Tehran-based blockchain project Areatak has reportedly received inquiries for over 1,000 colocation mining contracts, setting up the infrastructure, and charging miners a percentage of their earnings.

Binance’s move against Iranian customers comes at a time when the Iranian government was reportedly working on plans to launch a state-owned cryptocurrency backed by the national fiat currency— Rial.

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