The Financial Crimes Enforcement Network (FinCEN) issued an advisory report on Oct. 11 to US financial institutions warning them about Iran’s activities to “exploit the financial system” and evade US sanctions using cryptocurrencies.
According to the paper, entitled Advisory on the Iranian Regime’s Illicit and Malign Activities and Attempts to Exploit the Financial System, FinCEN accused Iran of using front and shell companies to exploit global financial systems to generate funds to support terrorist actions, human rights abuses, ballistic missile developments, and actions to undermine US sanctions.
The report highlights that Iran has been engaging in Bitcoin transactions worth $3.8 million a year since 2013. FinCEN says that although the Central Bank of Iran (CBI) has banned financial institutions from facilitating cryptocurrency transactions, individuals and businesses can still have access to digital currencies by simply using the Internet.
The report also advised institutions to be on the lookout for blockchain ledgers with activities originating or terminating in Iran.
Iran’s National Cryptocurrency Ambitions
Sputnik International reported on July 25 that Iran was planning to develop a national cryptocurrency as a hedge against US-imposed sanctions. Iran media stated that the Directorate for Scientific and Technological Affairs of the Presidential Office already had plans to develop a national cryptocurrency.
Alireza Daliri, the Directorate’s deputy for management and investment affairs, made the announcement back then and was quoted as saying:
“We are trying to prepare the grounds to use a domestic digital currency in the country. This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.”
In April, Iran took a tough stance against cryptocurrencies and banned its local banks from participating in any cryptocurrency-related activities.
However, in as little time as in June, the Islamic country was already singing a different tune as the country’s Supreme Council of Cyberspace legalized the mining of cryptocurrencies.
Abolhassan Firouzabadi, secretary of Iran’s Cyberspace Council, said at the time that the country would draft a framework for crypto participation on Sept. 22. Firouzabadi further said that the country would use cryptocurrencies to trade with its allies and minimize the impact of the sanctions.
The country has not yet released the name of its cryptocurrency. The digital currency will be developed on the HyperLedger Fabric platform.
By any standard, Iran is following in the footsteps of Venezuela, which launched its own cryptocurrency in order to circumvent US sanctions.
The US Reinstates Sanctions
In May, President of the United States Donald Trump announced that he would pull out of the 2015 Nuclear Deal, resulting in the reimposition of sanctions. Trump called the deal the “worst deal ever.”
The tough sanctions see Iran banned from acquiring US dollars, which function as the global currency of trade. The sanctions also restrict the purchase of Iran’s oil and investing in its energy projects.
FinCEN Warning: Iran Destabilizing the Financial System and Using Cryptocurrencies to Dodge Sanctions was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.