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.
