U.S. Financial Crimes Enforcement Network Bashes Iran For Using Crypto To Bypass Sanctions

The U.S. Financial Crimes Enforcement Network (FinCEN) released a brief detailing how Iran is allegedly using a number of strategies to evade sanctions, which includes the use of cryptocurrencies.

While FinCEN admits the use of cryptocurrencies is “comparatively small” in Iran, it says “at least $3.8 million worth of bitcoin-denominated transactions per year” has come from the country since 2013.

Asking Exchanges To Be Vigilant

In the briefing, the regulator is firm that cryptocurrency use could be a way for individuals and entities to circumvent sanctions.

As a result, FinCEN asks crypto-related institutions to look over blockchain ledgers to see if there is activity tied to Iran. It warns “new virtual currency businesses may incorporate or operate in Iran with little notice or footprint.”

According to FinCEN, Iranian individuals and businesses can still access cryptocurrencies through a variety of exchanges, even though reports have said the Central Bank of Iran banned in-country institutions from handling cryptocurrencies.

The regulator reminds financial institutions and exchange providers they should be prepared to comply with sanctions requirements and general anti-money-laundering (AML) regulations.

Red Flags For Entities To Watch Out For

FinCEN writes in the report how entities in the financial sphere should take note of several ‘red flags’ that could signify deceptive activity by the Iranian regime.

Three of the points have to do with cryptocurrencies. The regulator says financial institutions (including cryptocurrency exchanges) should watch out for “login activity from entities in Iran,” especially in the case of cryptocurrency transfer.

FinCEN writes how details like IP addresses and time stamps can be useful evidence for authorities who are investigating illicit activity.

Additionally, it says to be on the lookout for unexplained transfers in and out of accounts, especially if they are combined with cryptocurrency exchange transactions.

Uzbekistan Reportedly Looking to Launch National Cryptocurrency Mining Pool

Uzbekistan is reportedly looking to launch its own national cryptocurrency mining pool and a cryptocurrency exchange to accompany it, in bid to bring crypto miners out of the shadows and attract foreign investors.

According to news.bitcoin.com, a government body under the President of Uzbekistan, the National Agency for Project Management (NAPM), has revealed at a conference its plans for the cryptocurrency and blockchain sector this year.

The organization’s plans include the launch of a national mining pool to help consolidate the mining power of domestic and foreign miners in the country, and a cryptocurrency ensure to help miners sell their digital assets.

Local news outlets reported the country is launching its national mining pool to increase transparency and security for cryptocurrency miners, and to make it more attractive for foreign investors. The NAPM also reputedly claims the pool will improve energy efficiency.

The accompanying digital asset exchange, dubbed Uznex, is based in the country’s capital, Tashkent, and will be operated by the South Korean Kobea Group. It’s set to launch next week, on January 20. Its currently lists several trading pairs including ETH/BTC, ETH/BCH, and BTC/BCH. The trading platform’s website is still in beta, but it already notes users will be charged a fee to withdraw funds.

While the initiative seems to be pro-cryptocurrency, the news outlet points out there’s more to look into. As CryptoGlobe covered, last December an order that restricts how Uzbeks can trade cryptocurrency was issued, effectively restricting them to licensed exchanges only.

Another government order tripled electricity prices for domestic cryptocurrency miners, completely crushing their operations’ profitability.  This, unless they moved to the national mining pool, which would allow them to pay standard rates.

Vyacheslav Pak, the NAPM’s deputy director, was quoted as saying:

I think this will be one of the main measures to encourage participation in this pool.

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