The United States announced sanctions on Iran’s biggest cryptocurrency exchange on Tuesday, accusing it of enabling the Iranian government and blacklisted state institutions to circumvent Western sanctions.
The new sanctions follow a Reuters investigation published on May 1 which showed how Nobitex had become a central node in a parallel financial system used to process hundreds of millions of dollars for Iran’s central bank and the Islamic Revolutionary Guard Corps. The report also revealed how Nobitex continued operating even after the government-imposed internet shutdown, processing millions of dollars of transactions.
“While Iran’s economy is in free fall, the regime has chosen to co-opt digital asset technologies for its own corrupt agenda, including evading sanctions and transferring wealth out of the country,” Treasury Secretary Scott Bessent said in a statement.
Besides Nobitex, three other exchanges were also blacklisted by the US.
The Reuters investigation showed how Nobitex is controlled by two brothers from one of Iran’s most powerful families, with close ties to the new supreme leader. The two are members of the Kharrazi family, one of the most influential dynasties in the Islamic Republic. Corporate records show that when the exchange started, the brothers were listed under a surname rarely used by members of the family.
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The US Treasury announced Tuesday that the two brothers, Seyed Mohammad Ali Aghamir Mohammad Ali and Seyed Mohammad Aghamir Mohammad Ali, had also been individually sanctioned, along with the exchange’s chief executive officer, Amir Hossein Rad.
Nobitex had provided “significant support” to the Iranian government and facilitated a “significant number” of digital transactions linked to the IRGC and Iran’s central bank, the US Treasury said in the statement. “Following the commencement of US combat operations in Iran, Nobitex played a role in protecting and moving assets and funds out of Iran to shield regime wealth despite internet blackouts.”
Nobitex could not be reached for comment on the sanctions, which were announced after normal business hours in Iran.
The US Treasury Department building is shown at dusk in Washington on June 6, 2019. (AP Photo/Patrick Semansky)
In an emailed statement to Reuters in April, Nobitex said it had no direct government connections and denied assisting the state. It said that any illicit funds moving through Nobitex did so without management approval or awareness. The company also said that the two brothers had never used an alternative identity or changed their identity.
The Trump administration’s latest announcement is one of a variety of measures put in place to inflict economic pain on Iran. It has also imposed secondary economic sanctions on countries doing business with people, firms, and ships under Iranian control — including allies like the United Arab Emirates and competitors like China. Banks have received warnings about handling Iranian money.
And last week, the US imposed sanctions on Iran’s newly created Persian Gulf Strait Authority, which is an agency intended to control shipping through the narrow Strait of Hormuz. Treasury calls the agency a “scheme to extort international shipping.”
Meanwhile, the US military has stopped merchant vessels trying to break through a US-led blockade of Iranian ports. The US launched the blockade on April 17 after Iran effectively closed the strait after the war in the Middle East began with US and Israeli strikes on February 28.
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