Centralized exchange in Iran

FATF Blacklisting: Iran is currently on the FATF's "Public Statement – High-Risk Jurisdictions Subject to a Call for Action," meaning it is subject to a call for countries to apply enhanced due diligence and, in the most serious cases, countermeasures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating from Iran. This significantly impacts any international VASP's ability or willingness to operate in or with Iran.

International Sanctions: Iran is under extensive international sanctions (primarily from the US), which prohibit most financial transactions involving Iranian entities or individuals, further complicating VASP operations.

Evolving Domestic Stance: Iran's stance on cryptocurrencies has evolved from outright bans to allowing regulated mining and exploring the use of crypto for bypassing sanctions (e.g., import payments), while generally maintaining strict controls over public trading and use for domestic payments.

Law on Combating Money Laundering (LCML):

Key Provisions: Defines money laundering offenses, sets reporting obligations, establishes the Supreme Council for Combating Money Laundering and Financing of Terrorism, and outlines the role of the Financial Intelligence Unit (FIU).

Law on Combating the Financing of Terrorism (LCFT):

Purpose: Addresses the financing of terrorism. Any VASP, if operating, would be subject to its provisions, especially regarding sanctions screening and suspicious transaction reporting.

Central Bank of Iran (CBI) Regulations and Directives:

Early Stance (2018): The CBI initially banned all dealings in cryptocurrencies by banks and financial institutions, citing money laundering risks.

Evolving Stance (2019-Present): The CBI later allowed cryptocurrency mining as an industrial activity, requiring miners to obtain licenses and sell their mined crypto to the CBI for import financing. However, the use of cryptocurrencies for domestic payments is generally prohibited, and public trading platforms for major cryptocurrencies face significant restrictions or are not officially sanctioned in a broad retail sense.

Applying Existing AML: The CBI's stance implies that any entity authorized to deal with virtual assets (e.g., licensed miners selling to CBI, or potentially future regulated exchanges) would be subject to existing AML/CFT laws and CBI directives regarding KYC, transaction monitoring, and reporting.

Identification and Verification:

National ID number (National Code for Iranians)

Legal name and trade name

Registration number and date

Legal form (e.g., company, partnership)

Registered address and principal place of business

Details of directors, senior management, and beneficial owners (shareholders owning 25% or more, or controlling persons).

Verification through official corporate documents (e.g., certificate of incorporation, articles of association).

Judiciary: Prosecutes individuals involved.

Arrests and Imprisonment: Individuals operating these farms often face arrest, fines, and potential prison sentences. Reports frequently mention dozens or hundreds of arrests during major campaigns.