A Reuters investigation has traced at least $676 million in cryptocurrency flowing from wallets linked to a Dubai-based Iranian front company to Binance, the world’s largest cryptocurrency exchange, as part of a broader network allegedly used to evade Western sanctions.
According to the investigation, the funds originated from Shelbit, an unlicensed Dubai-based cryptocurrency exchange that Reuters identified as a central hub in a wider Iranian money-moving operation. Blockchain data reviewed by Reuters and analyzed by independent crypto investigators showed that at least $676 million in digital assets moved from Shelbit-linked addresses to Binance since May 2024.
Reuters reported that Shelbit processed at least $4 billion in cryptocurrency over the period examined, serving customers that allegedly included Iran’s central bank, parties linked to the Islamic Revolutionary Guard Corps (IRGC), and a network of more than 2,000 Persian-language gambling websites. The report described Shelbit as one of the key conduits allowing sanctioned Iranian entities to access global crypto markets despite financial restrictions.
The Reuters findings do not allege that Binance knowingly facilitated sanctions evasion. Rather, they document blockchain flows showing that cryptocurrency originating from Shelbit wallets ultimately reached Binance addresses.
Binance Says Compliance Measures Worked
Responding to Reuters, Binance said its compliance systems detected activity involving users associated with Shelbit and acted accordingly.
“When users associated with Shelbit interacted with our platform, our compliance program operated as it should have: it investigated, froze the relevant accounts, and reported them to law enforcement,” the company said in a statement provided to Reuters. Binance did not disclose how much of the reported $676 million was frozen or whether any funds remained accessible before enforcement action was taken.
The company has repeatedly emphasized that blockchain transactions are publicly traceable and that exchanges can identify and restrict suspicious activity through transaction monitoring and blockchain analytics.
The latest report nevertheless adds to continuing scrutiny of Binance’s anti-money laundering controls following its 2023 guilty plea in the United States, where the exchange agreed to pay more than $4.3 billion and strengthen its compliance systems after admitting violations involving anti-money laundering and sanctions laws.
Broader Sanctions-Evasion Network Under Investigation
Reuters’ investigation portrays Shelbit as more than an ordinary crypto exchange.
The report alleges that the platform acted as a financial gateway connecting Iranian gambling operations, sanctioned state institutions and international cryptocurrency markets. Blockchain investigators cited in the report said the exchange also received funds linked to Iranian state-approved Bitcoin mining operations before routing assets through global crypto infrastructure.
The investigation prompted regulatory action in the United Arab Emirates. Dubai’s Virtual Assets Regulatory Authority (VARA) ordered Shelbit to cease unlicensed virtual asset activities, citing concerns that extended beyond consumer protection to cross-border transactions with potential money laundering and terrorism financing implications.
The findings also arrive amid increasing international scrutiny of cryptocurrency’s role in sanctions enforcement. Governments have invested heavily in blockchain analytics to trace digital asset flows, while exchanges face growing pressure to identify and block transactions involving sanctioned entities.
Although Reuters identified substantial blockchain transfers from Shelbit-linked wallets to Binance, the investigation does not conclude that Binance intentionally facilitated illicit activity. Instead, it highlights how cryptocurrency can move across multiple intermediaries before compliance systems detect suspicious transactions.
For regulators, the case underscores both the transparency and complexity of blockchain-based finance. While public ledgers make large transactions traceable, identifying beneficial ownership and enforcing sanctions across multiple jurisdictions remains a significant challenge as digital assets become increasingly integrated into the global financial system.