Crypto exchange Binance has informed its remaining customers in Iran to withdraw their funds as the company will be complying with international sanctions.
According to a number of local sources, an email sent to Iranian users indicates:
“If you have an account with Binance and fall into that [sanctions] category, please withdraw your assets from Binance as soon as possible.”
Blockchain Association of Iran chairman of the board Sepehr Mohamadi states that for several months now, emails like the ones sent by Binance have been making their way around. However, there has been a significant rise in their number after the reinstatement of US sanctions which began on November 5.
Based on information provided by Iranian sources, Binance has been shutting down accounts whose owners presented Iranian passports in their know-your-customer (KYC) procedure. However, some Iranian traders say that this week, the crypto exchange has begun warning accounts linked to Iranian IP addresses to withdraw their cryptocurrency.
A researcher for Iran-based Blockchain project Areatak, Nima Dehqan says that the fact Iranians are unable to trust crypto exchanges is no longer a surprise.
D.C-based consulting firm FS Vector partner John Collins, who happens to be a former Coinbase head of policy, says that exchanges will have a hard time catering to users in these jurisdictions if they wish to serve U.S. citizens.
In this connection, Dehqan states that the Iranian Bitcoin community has united to form local businesses and support networks. Dehqan adds that they have crypto groups in Telegram or WhatsApp for users who what to change their digital currencies in person.
Other vendors have also opened physical shops to be able to conduct conventional KYC, in case Iranian authorities begin questioning their activities.
The U.S. regulatory crackdowns on trading platforms like EtherDelta have encouraged many exchanges that cater to American users to become more cautious about their KYC requirements. SimilarWeb indicates that around 13 percent of Binance website traffic originates from the United States.
Nelson Rosario, a lawyer who specializes in crypto-related legal issues, states that regulators are now starting to look into exchanges. In connection with Binance’s move, Rosario, who is with Chicago-based firm Smolinski Rosario Law, also says that this only goes to show how complicated it is for businesses serving customers from all over the world.
Notably, he adds that Binance does not have an office in the U.S., stating that regulators are more focused on local companies.
Binance’s decision comes after Iranian authorities have hastened efforts for its national digital currency.
This predicament has compelled Iranian crypto enthusiasts to set up mining operations, instead of just relying on external platforms.
An Iranian media report states that local regulators are also trying to devise a legal system for the country’s budding crypto mining industry.