Iran’s first crypto-based import sparks sanctions evasion concerns
Iran this week placed its first official import order using cryptocurrency, a step that could allow the country to circumvent US sanctions.
The order, worth $10 million, could enable the nation to trade using digital assets and avoid US dollar dominance in the international financial system and circumvent agreements with other sanctioned countries like Russia, reported Reuters.
Iran relies on crypto for foreign trade
“By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with the target countries,” an official from the Ministry of Industry, Mines and Trade said on the social networks.
Iran is under a near-complete economic embargo by the United States, with the State Department’s Bureau of Economic Sanctions Policy and Implementation responsible for enforcement and enforcement. of these penalties.
Yesterday, the US Treasury Department’s Office of Foreign Assets Control also sanctioned token mixing platform Tornado Cash for money laundering violations.
As it appears the agencies have tightened their grip on the digital space, as evidenced by the mounting sanctions against Russia, marketers are finding ways to flout the rules.
Anand Sithian, an attorney at Crowell & Moring, and former general counsel in the Criminal Division of the Department of Justice’s Asset Forfeiture and Money Laundering Section, told CNBC: , avoid fiat on-ramps -crypto and crypto-to-fiat exit ramps during centralized virtual currency exchanges, thereby bypassing sanctions screening.
Crypto mining used to circumvent sanctions
The Dubai-based exchange Coinsfera is also attracting traders from countries under sanctions, including Russia and Iran. Meanwhile, Binance, the largest crypto exchange by volume, has been accused of allowing users in Iran to trade in violation of US sanctions.
Meanwhile, Kraken is the latest exchange being investigated by the US Treasury’s Office of Foreign Assets Control for sanctions violations.
And the International Monetary Fund (IMF) had issued a warning earlier this year that countries like Iran and Russia could use cryptocurrencies to circumvent sanctions by using their excess energy resources – which they cannot. export – to power mining, a more energy source. intensive method of verifying cryptocurrency transactions.
Elliptic estimated last year that 4.5% of all bitcoin mining occurs in Iran, allowing the nation to evade trade sanctions and earn hundreds of millions of dollars in crypto-assets that can be used to purchase imports and overcome the country’s economic restrictions.
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