The United States on Tuesday announced sanctions on Iran's largest cryptocurrency exchange Nobitex and its founder, accusing it of helping the Iranian government and blacklisted national institutions circumvent Western sanctions. The operation follows an investigative report published by Reuters on May 1, which revealed that Nobitex had become the core node of a "parallel financial system" used to process hundreds of millions of dollars for the Central Bank of Iran and the Islamic Revolutionary Guard Corps (IRGC). The investigation also revealed that Nobitex continued to operate after the government imposed an internet shutdown, processing millions of dollars in transactions.
U.S. Treasury Secretary Scott Bessant said in a statement that at a time when Iran's economy is in "free fall," the Iranian regime has chosen to "adopt digital asset technology for its own use" to serve its corrupt agenda, including circumventing sanctions and moving funds out of the country. In its sanctions statement, the Treasury Department noted that Nobitex provided "significant support" to the Iranian government and facilitated "a substantial number" of digital transactions related to Iran's Central Bank and Revolutionary Guard Corps. The statement also said Nobitex has played a role in protecting and moving assets since the start of U.S. combat operations in Iran, moving regime wealth out of Iran amid an internet blackout to avoid tracking.
Previous Reuters investigations revealed that Nobitex is controlled by two brothers from one of Iran's most powerful families and have close ties to the new supreme leader. The two men belong to Iran's influential Harazi family, and business registration records show that when the exchange was founded, the brothers used a surname rarely used by family members to appear in company documents. The U.S. Treasury Department announced on Tuesday that it had added the two brothers - Syed Muhammad Ali Agamil Muhammad Ali and Saeed Muhammad Ali Agamil Muhammad Ali - to a sanctions list, along with Nobitex CEO Amir Hussein Raad.
Nobitex has not yet made the latest response to this sanction, and the news of the sanctions was released after Iran’s normal business hours. However, in April this year, the company stated in a response to an email interview with Reuters that there was “no direct connection” between the company and the government and denied assisting the country in related activities. Nobitex said at the time that any illegal funds flowing through its platform were done without the knowledge and approval of management. The company also said the brothers never used other identities or changed their identity.