Binance, the largest crypto exchange of the world, has reportedly blocked thousands of Iranian accounts that it shouldn’t have, according to former employees. Some of the Iranian customers had their accounts blocked without any explanation, and they had to withdraw their funds without knowing the reason behind the block, media reports said. , as stated by reports
Binance’s Global Head of Sanctions, Chagri Poyraz, admitted that despite the company’s efforts to improve compliance protocols, the initiative to remove sanctioned clients from its database had resulted in blocking accounts that shouldn’t have been. Poyraz claimed that the issue had been mostly resolved, but dealing with comprehensively sanctioned countries like Iran was nuanced, and deciphering which Iranian customers were in compliance and which were not was time-consuming.
Although it is not forbidden for Iranians to use Binance services, the company was supposed to block clients who live in Iran due to US sanctions that ban such activity. However, Poyraz explained that it is tricky to vet Iranian clients since the country is vast, and many Iranians purchase KYC accounts on the dark web to use services like Binance or other platforms.
Poyraz stated that while the company was making efforts to eliminate Iranian accounts, it inadvertently affected some Iranians who were eligible to use the platform.
Binance had permitted Iranian customers to demonstrate that they legally resided outside of Iran, but the process of proving their residency status took several months for certain customers. Consequently, these customers were unable to engage in any trades or transfer their cryptocurrency from one wallet to another.
According to a few former customer service representatives, transparency while dealing with Iranian customers was inconsistent. They were directed not to provide an explanation to Iranian clients about the reasons for blocking their accounts and to request them to withdraw their funds. One ex-staff member mentioned that they were not authorized to disclose the reason for the ban, while another confirmed this policy.
Binance has been under intense public, political, and regulatory scrutiny worldwide, with allegations that the company serviced traders and firms in Iran for years despite US sanctions that forbid such activity. However, Binance CEO Changpeng Zhao stated that the company never aimed to single out one group of people and that nationality does not make them sanctioned.
