Introduction
Binance one of the seemingly biggest crypto exchange has been in regulatory crosshairs for sometime now. Binance even withdrew its application for a license in Singapore. However, this recent news could potentially have criminal liability and more far reaching consequences particularly, as the US Department of Justice and Treasury Department are investigating these sanctions violations.
Almost 75% of the Iranian funds that passed through Binance were in a cryptocurrency called TRON that gives users an option to conceal their identities and thus obfuscate the flow of funds. Tracing TRON transactions wasn’t possible until earlier this year when another blockchain analytics started supporting the currency for investigations.
It is worthwhile to mention that at the time of writing this article the Iranian cryptocurrency exchange is not subject to US sanctions. However, Binance having processed transactions from a sanctioned country may have possibly violated US primary or secondary sanctions.
Investigation
So, AMLBot began an investigation into the transactions and there were namely many currencies involved including BTC, ETH and TRON. Our investigation reveals that Nobitex did indeed process transactions. For the ease of reference we will include some diagrams based on our investigation to give a bird’s eye view of the process involved in arriving at our conclusion.
Firstly, we ran a check on the addresses. One of the TRON addresses involved in the transactions shows that it is a severe risk address and should not be transacted with.
Upon further investigation of a few BTC addresses linking Binance with Nobitex, we figured that there is evidence in that regard as illustrated in the diagram below.
As per our blockchain analytics Nobitex is classified as a Very High Risk (VHR) exchange. It would not out of place to mention that one of three entities involved in the same transaction happens to be Hydra Marketplace which is a Darknet Market and has been sanctioned by the US Treasury Department under OFAC sanctions regime.
AMLBot also tracked a ETH transaction involving Binance and Nobitex. You will notice that the sender is none other than Binance and Nobitex is receiving the funds.
Perhaps, given the long arm of the law, we may hear of regulatory action, penalties against actors involved.
Conclusion
AMLBot team actively monitors all trends and emerging typologies in the cryptocurrency compliance space.
