Iran Moves to Restrict Cryptocurrency Exchanges Under “Currency Smuggling” Laws


The Iranian government has just made channels to cryptocurrency markets riskier and more confusing than ever.

According to Iranian news bulletin ArzDigital, parliament released a proposal this week to include cryptocurrency in existing “currency smuggling” and foreign exchange regulations. The result of this future regulation is that Iranian entrepreneurs run a greater risk of being jailed by local authorities or sanctioned by Americans.

The law would mean that Iranian cryptocurrency exchanges must be licensed by the Central Bank of Iran and follow legacy foreign currency exchange guidelines, although it is unclear how existing exchanges should require licensing or adapt those legal regulations to the technology. blockchain. What is clear is that the Iranian government is trying to crack down on capital outflows by preemptively justifying any moves to shut down or penalize local cryptocurrency exchanges.

However, the Iranian market is not strictly made up of local and over-the-counter traders. Unlike fiat currency exchanges, several cryptographic operations serving Iran are headquartered in other countries. It is unclear how the new licensing guide applies to decentralized ecosystems.

For example, Binance-owned analytics site CoinMarketCap, headquartered in the US state of Delaware, listed the KingMoney token in the first quarter of 2020. CoinMarketCap CSO Carylyne Chan said that “there were no obvious red flags that emerged during the application process “. However, this bitcoin clone token is clearly being promoted in suspicious ways. Social Forensics founder Geoff Golberg said the new follower date indicates that “inauthentic accounts were created solely to make their Twitter community appear stronger before being listed by CMC.”

The cryptocurrency exchange UtByte and the KingMoney token project appear to be both registered in Sweden under an umbrella company called Sweden Invest Group AB, led by Swedish-Iranian businessman Reza Khelili Dylami. (Dylami could not be reached for comment at press time.) Some Farsi blogs have labeled both of these projects as an interconnected “scam.” Regardless, it was obviously marketed to Iranians for the purpose of cross-border transactions.

According to Chainalysis, “UtByte has received approximately $ 13.8 million in BTC and has strong transactional connections with Iranian cryptocurrency services and exchanges.”

The Trump administration’s concerns about Iranians using cryptocurrency to circumnavigate sanctions appear to be correct. It is unclear how cryptocurrency exchanges would continue to bypass sanctions if, in the future, they were counted and registered with the Central Bank of Iran.

Co-founder of Cryptoland Hassan Golmohammadi | he said the company has its registered office outside of Iran but operates locally. When asked about Cryptoland in January 2020, a press rep for the Tron team said they don’t work directly with the Iranian company, that any Farsi-language marketing of crypto projects is done “by Tron’s China / Asia team, not by Tron USA, “And” no actual marketing is done “in Iran.

According to Babak Jalilvand, editor of the leading cryptocurrency blog Farsi CoinIran, there is a “significant” TRX community in Iran precisely because “the Tron team” uses “their marketing skills to attract people”.

However, it is unclear how the sanctions would apply to global crypto communities.

While not familiar with the Tron Foundation in particular, Dan Newcomb, a compliance expert at the law firm Shearman & Sterling, said in January that US economic sanctions applicable to Iran apply to any individual or organization doing business in the states. United

“Marketing in Iran is soliciting business in Iran,” Newcomb said.

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