Binance served crypto traders in Iran despite U.S. sanctions
reuters.com
reuters.com
Content: "Binance banned Iranian users after sanctions, 7 got missed/found a workaround, they were banned later anyways"
Folks who expect the headline to be extra detailed will always be dissatisfied IMO.
It’s on the individual to read the story. Folks who don’t will misunderstand regardless.
But to be clear I’ve got no problem with your clarification here either.
It's not even like there's nothing to be seen! "Binance may have turned a blind eye to and encouraged VPN usage" would have been a much better summary!
I try to guess what the headline means before reading the article; if I guessed wrong I downgrade that source.
They are to be taken exactly as written, since they are designed to be displayed as one liners in a financial terminal, like in this image:
https://i.insider.com/4bc623be7f8b9a2b3a870500
They actually put a lot of work into their titles.
The former reinforces preconceived notions that all crypto organizations are criminal and blatantly violate the law.
The latter presents a nuanced situation of the difficulties of complying with international sanctions as an internet company.
It's naive to think that headlines aren't explicitly designed to not only be clickbait, but also to incept and reinforce false ideas in the minds of the vast majority who won't read the story in detail. Even if it is our individual responsibility to read the story before forming opinions, that's not the reality.
> The exchange's popularity in Iran was known inside the company. Senior employees knew of, and joked about, the exchange's growing ranks of Iranian users, according to 10 messages they sent to one another in 2019 and 2020 that are reported here for the first time. "IRAN BOYS," one of them wrote in response to data showing the popularity of Binance on Instagram in Iran.
The implication of the article is not that 7 people did it. It's that the platform is widely popular in Iran.
"Internal messages indicate that Binance might have turned a blind eye to Iranians using VPNs (and later banned them)" is a much weaker claim than "Binance continued serving Iranians despite sanctions"
As I mentioned in a different comment, the headline might be technically true, and there's definitely a story, but the headline paints a drastically different picture than the article. Almost every line of "we found someone in Iran who had gotten in" is followed by "they got banned later"
Given that, this headline doesn't seem beyond the pale:
> Binance served crypto traders in Iran despite U.S. sanctions
In other words, (US) sanctions have a lot of ways to affect even corporations from third-party countries.
[1] https://asu.pure.elsevier.com/en/publications/sanctions-and-...
[edit] Perhaps a more readable text is https://www.williamsmullen.com/news/us-sanctions-laws-danger...
Sure seems like they thought they were subject to them.
Pretty sure the non-US Binance entity would like to be able to maintain dollar bank accounts, or let their executives and employees travel to America and allied territory. (Which is why they banned these users.)
It is.
> Xiaomi for example
Xiaomi was blacklisted [1]. Their CFO was arrested in Canada for fucking this up [EDIT: Nope!]. Xiaomi turned off their devices in Iran last year [2] in a bid to lift the restrictions.
> Samsung
There was a brief respite in sanctions during the nuclear deal. The pages you’re citing are from that era. Samsung withdrew from Iran [3]. Iran, for good measure, responded by banning them [4].
[1] https://www.cfo.com/accounting-tax/2021/01/xiaomi-and-cnoonc...
[2] https://www.globaltimes.cn/page/202109/1234058.shtml
[3] https://asia.nikkei.com/Spotlight/Iran-tensions/Iran-sanctio...
[4] https://asiatimes.com/2021/11/iran-bans-goods-from-south-kor...
If I recall correctly, CFO of Huawei was arrested in Canada, not Xiaomi.
This is also beyond the general thing which is that you often have national-level subsidiaries that are only "sales partners" or the like.
I do think there's also some differences depending on the kind of goods sold. Binance existing and theoretically helping with circumvention of sanctions probably make it a beautiful target.
I once interviewed for a company that ran gambling websites (legal in the UK) and it was explained to me that if I worked there I would never be able to travel to the US. I declined the job. Some time later one of their executives was on a plane which was diverted to a US airport and he was arrested and charged.
Also, what about the other passengers in the plane? Annoying a bunch of passengers just to arrest one guy for working for a gambling website seems excessive, no? Or was it a private plane?
That seems... suboptimal.
All it takes is a corridor from arrivals to departures to allow people to leave again on a different plane out of the country.
Yes. There are some details at the following article: https://en.wikivoyage.org/wiki/Avoiding_travel_through_the_U...
Some US airports and airlines are like that for some flights (e.g. international delta flight to Detroit and then onward to Canada). Finally US customs figured that there’s less to worry about if you just hold onto my bags instead of forcing me to pick them up.
(I mixed up the details in my hazy memory - I think my interview was in 2001, so over 20 years ago).
The Wikipedia page links to a different UK betting company / exec who was also arrested in the same manner: https://en.wikipedia.org/wiki/Peter_Dicks
Edit: And same company, different executive: https://en.wikipedia.org/wiki/Gary_Kaplan Company looks super-shady in hindsight, I'm glad I didn't take that job :)
With an newer exception for intrastate gambling
And an even newer exception for “games of skill” (sports fantasy stuff simply winning challenges to prohibitions)
Many other kinds of gambling sites use a seperate company for payments or just find a friendly bank to break the law
Regardless, the US consumer has many many options and does not have to care
Which law, exactly? Because there are plenty of legal ways to gamble online.
You just have to use an app that works with a legal casino, like MGM, Caesars, or one of the many many competitors, and be physically in a state where it's allowed.
As well, just because there is one way where online gambling is legal, does not mean that all ways are legal. Ie, just because it’s doable, doesn’t mean that you can’t still be flouting the law.
GP suggests it's been 20 years since their interview. Looking through [0] sports betting was illegal almost everywhere until 2018. Prior to that, it was legal in much of Europe, and there were indeed a number of companies who were looking the other way on (and indeed indirectly marketing to) Americans, in violation of US laws.
[0] https://en.wikipedia.org/wiki/Gambling_in_the_United_States#...
Sounds like they were just trying to make themselves sound like super-cool rebels, because there are plenty of very legal online gambling options in the United States.
It's not available nation-wide. You have to be physically located in a state that permits online gambling, and use a service that is aligned with a legal casino. But it's a billion-dollar legal industry in the United States.
https://en.m.wikipedia.org/wiki/Extradition_case_of_Meng_Wan...
> Lawyers say this structure means Binance is protected from direct U.S. sanctions that ban U.S. firms from doing business in Iran. This is because the traders in Iran used Binance's main exchange, which is not a U.S. company. But Binance does run a risk of so-called secondary sanctions, which aim to prevent foreign firms from doing business with sanctioned entities or helping Iranians evade the U.S. trade embargo. As well as causing reputational damage, secondary sanctions can also choke off a company's access to the U.S. financial system.
I know it's the internet and everyone just reads the headline but you could at least Ctrl- or Cmd-F before commenting.
Probably not, because that's boring and doesn't make headlines you see as often.
8 of the top 10 most penalized companies in the world are banks that have nothing to do with crypto.
If we're using ponzi scheme definition loosely enough to label most of the "scams" of crypto as a ponzi scheme, then literally the entire stock market is a ponzi scheme - how else would you pay investors more if you weren't making money off of new investors paying more for the exact same stock?
Are there a metric ton of scams in crypto? Sure, same for stocks - just look at penny stock pump n dumps. They're everywhere. Regulation didn't stop them or maybe even reduce them. The solution to this is to only buy into companies or crypto that have serious missions with serious investors and to stop pretending the gamblers losing money on penny stocks or small-cap crypto are victims. They aren't victims any more than the government sponsored casino/lottery users are victims. Which, maybe those people are victims, but society has accepted that as legitimate, so why would we put unbalanced expectations on crypto when society has deemed these other, quite equivalent forms of gambling as legit?
No, this is very wrong and is based on a fundamental misunderstanding of stocks that seems to be going around in crypto circles. The stockholders make money from the actual, real profits of the company, either through dividends or buybacks. The entirety of crypto is like if everything were an unregulated penny stock in a company that openly announces they have no profits and they have no plan to ever make profits.
The majority of my profits in the stock market have been through asset appreciation. Just take S&P500, a very widely invested in fund - the average dividend yield is 4% while the average return is 12% - which means for that very common stock the majority of the profit came from appreciation.
This doesn't address buybacks, which is a pointless variable as buybacks are nothing more than "new investments" coming in to buy the exact same stock at a different price.
And you can see from the last few months how that's still an inherently risky attitude towards investing. I agree, buybacks are also a questionable scheme that can easily get used to scam, but at least those are (in theory) based on real profits. You're betting that the company is going to grow and create more valuable products and services in the future. In crypto, there's no profits and no value whatsoever. The average dividend yield of a crypto investor is always going to be 0%. You're not betting on anything besides the ability to dump the thing off on someone else.
No they're not. Neither is Crypto, and that's the only point that's being made here. If that seems controversial or incorrect to you, then I think you have some emotional hangup about crypto
I wouldn't describe it as a lean against crypto: the unfortunate thing is that some people have a viewpoint about crypto more akin to a fiery hate. There's an intensity to this emotion for some reason. I'm not sure if it's resentment by some for missing an opportunity to make money, but some people here can't talk objectively about crypto for some reason.
For what its worth, I think it's just fine to like or dislike crypto and weigh its merits reasonably, but there's too much emotion here to have good conversations about the possibilities.
To the contrary: It's the crypto people who can't talk objectively about blockchains, because every single "invention" they come up with has some kind of money-making scheme attached to it. There's very little talk of blockchains without the crypto tokens attached, because a blockchain without that is just an ordinary boring old distributed database, and that isn't fun to them. Every time I try to talk about that among a group of crypto enthusiasts, I either get ignored or the conversation fizzles. Even you're doing the thing where you assume that someone must not want to talk about it because they missed out on the opportunity to make money. That whole mentality is toxic and illustrates the ponzi-like nature of the scheme; those who got in first can make a lot of money from cashing out early, everyone else will get stuck holding the bag.
There's very little talk of financial systems without the dollars attached.
Parties needs incentive to keep operating the chains. These vary. Many are financial.
I'm not sure how it's possible to talk about the benefits of a blockchain without talking about the tokens in some way. Incentives matter when it comes to real-world policy and human behavior. You might be asking for something impossible to create a situation where you feel that you always win the argument.
When it comes to the benefits of the tokens, I'm not referring to mere price speculation among the 101,001 random Internet coins and tokens, which I can understand being jaded by, but about how utility tokens can provide something very valuable in the process.
To give one example: in the case of Oracles and specifically Chainlink (ticker: LINK), the tokens not only power the network, but can provide a concept called crypto-economic security. This means that the cost of compromising the network should exceed the potential value gained from doing so. This whole concept is remarkably fascinating from a Computer Science/Security/Philosophy/Economics perspective and should be a game-changer when it comes to getting any kind of distributed application accurate input. There's a bunch of very interesting problems like this all throughout the crypto landscape.
I understand that it feels like price speculation drowns out much of the discussion, but if you're not finding interesting computer science problems and solutions within crypto, you might not be looking hard enough or thinking hard enough about where the world is heading.
It doesn’t sound like Binance is engaging in widespread sanctions evasion. They dropped their Iranian users. Seven users found a workaround. They were later caught and banned. Replace Binance with HSBC and it would be unsurprising, actually Binance did better, and the comments would be conspiracy theories about regulators being lax on violators.
"So rampant was the practice, prosecutors said, that on some days drug traffickers deposited hundreds of thousands of dollars at HSBC Mexico accounts. To speed things along, the criminals even designed “specially shaped boxes” that fit the size of teller windows at HSBC branches, according to the documents."
https://www.reuters.com/article/us-hsbc-probe-idUSBRE8BA05M2...
This is not to defend crypto, but making claims that crypto is somehow root of evil is silly. Anything that can be convenient for value transfer will be used by crimelord eventually - and people who will take cut of their money. Be it gold or diamonds, useless green papers or bit and bytes.
(and so on and so forth)
While technically true, the sanctions on its banks and central bank in practice mean it’s virtually impossible to be paid by an Iranian for your goods. (No, crypto doesn’t work, unless that consumer doesn’t interact with its banking system and you can convince the U.S. you’ve verified this.)
[edit] to rephrase: US cops close like 50% of murder cases. Is your gut reaction anger that since they can't catch 100% of them, they may as well not bother catching any at all? It's not really fair to the ones who get caught if some of their peers are getting away with it yeah?
Github got a license to operate in Iran: https://github.blog/2021-01-05-advancing-developer-freedom-g.... I don't know about Signal though, but they have been banned by Iran anyway because it allowed open communications to the outside.
Sanctions are often more palatable than war to people who can more easily overlook the death and suffering caused by poverty relative to the death and suffering caused by weapons.
If you're in the US, just look at how often you see headlines about murders by gun are explicitly reported on (as if any subcategory of murder was easier to solve with policy than the many many many things in poverty that kill people daily).
Binance trully is independent
Coinbase will freeze your assets the day the US doesn't like your face anymore
It already happened, and Coinbase is plagued with insider trading
> Out of desperation he sought information online and wound up texting the mother of Binance.US CEO Catherine Coley so he could get his funds unstuck. Now, Binance is closing his account.
https://www.coindesk.com/tech/2021/05/12/so-many-locked-out-...
> "We're blocking accounts of those on the sanctions list (if they have Binance accounts) and ensuring that all sanctions are met in full,"
https://www.reuters.com/technology/crypto-exchange-binance-s...
is binance an american company? if not then why should it care about american sanctions?
wasn't a few days ago that coinpayments.net exited USA from payments because of ongoing political events or some other reason? so they literally put USA in the same list of sanctioned countries that USA made in the first place. lol
[1] https://www.coindesk.com/business/2022/04/12/former-ethereum...
[2] https://www.justice.gov/opa/pr/us-citizen-who-conspired-assi...
With that in mind, the law takes a dim view of such shenanigans. I suspect that '.com's tacit acceptance of VPNs in serving US customers is probably more than enough for a judge to pierce the corporate veil.
[1] https://www.forbes.com/sites/michaeldelcastillo/2020/10/29/l...
Sanctions and ownership are very complicated, so there is no point in pretending this is a simple case.
I'm not a lawyer so you explain me if you know it. But SEC is already investigating Binance over their token[0].
[0] https://www.bloomberg.com/news/articles/2022-06-06/us-probes...
As a result, all of Binance's business in the USA and many of its allies might be blocked, its employees might find themselves see criminal charges or be barred from entering the USA (or many of its allies) and the company might find itself fined with its international assets pawned off by the government if it can't it won't pay the fine. If those assets include the cryptocurrency they bought on behalf of their users, that may mean that they can't actually their customers pulling back.
Furthermore, the USA might decide to include Binance in its sanction list, making their customers liable for much of the same problems.
Depending on how the government approaches this situation, this can crush Binance and a large part of the crypto industry with it.
Nobody cares about the sanction list of coinpayments.net.
Foolish Americans keep ending up in Singapore jails because they don’t think their rules apply to them when they go there and find out the hard way that they do. You don’t get to have your cake and eat it too because you disagree with the rules. If you want to do business with the west, you follow its rules or you stick to doing business with your own sphere of influence only.
unless those same rules are applied to american businesses doing work in other countries to follow their specific rules and then all hell breaks loose.
case in point, https://www.reuters.com/business/finance/exclusive-visa-comp...
https://www.paymentscardsandmobile.com/mastercard-files-comp...
So, mastercard/visa goes back to big daddy when they dont get their share of the pie according to their way, as opposed to the law of the land so they ask the big daddy to big dick them into submission.
same with many big american tech companies who apply american laws (dmca for example) on foreign users "because the data is held with american companies/DCs") and many other such examples
US sanctions are designed to completely cut off the target country or company from the global economy - even from doing business with foreign companies that have no obvious connection to the US. The US does this through secondary sanctions. If a European company does business in Iran, it will suddenly find itself unable to do business with anyone in Europe. Its bank will terminate its account, even if the bank doesn't do business in the US, because the bank is afraid of getting cut off from its business partners. US sanctions are designed to cascade in this way.
The end result is that Iran is almost completely cut off from the world economy, because the US decided that nobody anywhere in the world should trade with Iran.
I don't think any other country in the world applies secondary sanctions this aggressively.
When the US pulled out of the Iran nuclear deal, it effectively forced the EU to pull out of the deal as well. The deal was oversight of Iranian uranium enrichment in exchange for sanctions relief. But US sanctions scared off EU companies from doing business with Iran, so Iran got no real sanctions relief from the EU. It's a sign of how politically weak the EU is that it didn't respond in kind to US threats to sanction EU companies that did business with Iran. The EU effectively allowed the US to dictate EU trade policy.
But I wouldn't assume that this situation will continue indefinitely. Other countries will eventually respond to the US' overreach here.
In fact, I would find the alternative more disturbing--a get-out-of-jail-free card for anyone who can set themselves up to be sufficiently international.
A European company can't do business with Iran, because it does business with a European bank, which does business with another European bank, which does business in the US. A Chinese chip foundry can't do business with Huawei, because the foundry buys equipment from a Japanese company, which uses a piece of software written by an American company somewhere in its pipeline.
The global economy is tightly interconnected, and the US takes advantage of this fact to cut companies or even entire countries off from the global economy. As far as I'm aware, no other country uses secondary sanctions anywhere near as aggressively as the US does.
I am confident that many people here, fundamentally, understand the cruel and arbitrary nature of Iranian sanctions and would like to see them be less so. But that doesn't change the idea that, as of right now, this legal issue could be very major.
Completely irrelevant whataboutism.
> is binance an american company? if not then why should it care about american sanctions?
I suspect you haven't an understanding of the long arm of Uncle Sam.
That's also not accurate, after all many countries in which they do business have sanctions against Iran. The EU for instance. The UN. [1,2]
But beyond that, I think you'll find that US' view of its jurisdiction includes any businesses that do business with Americans. Even if they pretend not to do business with Americans with a '.us' entity set up under the 'Tai Chi' [3] framework to attempt to evade regulators. Especially if they have a long history of looking the other way over VPNs.
[1] https://en.wikipedia.org/wiki/Sanctions_against_Iran#UN_sanc...
[2] https://www.consilium.europa.eu/en/policies/sanctions/iran/
[3] https://www.forbes.com/sites/michaeldelcastillo/2020/10/29/l...
These sanctions tend to be narrow, targeted and in general do not prohibit trade relationships.
It's an entirely different ball game than the immoral US secondary sanction regime.
6 December: Resolution 43/54: Reaffirmation of resolution 38/180 condemning Israel and calling all nations to cut ties with it.
i guess being an american "ally" is much better than a UN resolution calling for a worldwide boycott of israel. How can they??? ALLIES?
guess USA likes to selectively apply international law, only when it suits their purposes
American sanctions are not international law, but rather American Laws, and companies outside the US are free to ignore US laws as long as they are willing to not interact with the US. Binance could easily serve Iran iff, they do not do any business in the US, or with US companies or persons, and none of their employees or officers or probably family members ever travel to the US or a country willing to extradite to the US. But companies cry foul about that because they want their cake of making money in the US and eat it too of making money from Iran. Does Iran not have retaliatory sanctions against the US?
Oh, and lot's of other countries have sanctioned Iran too, so, also don't touch those countries.