The Exchange at the Core
An unlicensed cryptocurrency exchange named Shelbit, operated by Iranian expatriate Siavash Kayvanpour, sits at the heart of a massive sanctions-evasion scheme involving Iran, according to recent reports. The operation allegedly routes money from a sprawling illegal gambling network through the exchange and onward to sanctioned Iranian entities, including the Central Bank of Iran. This activity helps Iran bypass international financial restrictions that are in place due to its support for certain groups and activities.
The illegal gambling network connected to Shelbit is said to be one of the largest in the world, operating over 2,000 platforms. It acts as a key client for Shelbit, channeling its proceeds through the exchange and to global cryptocurrency exchanges. This enables Iranian institutions to tap into international financial systems despite U.S. sanctions that should block such access. The scale of the network and its ties to Shelbit highlight the growing role of crypto in enabling complex financial evasion.
Investigators from the U.S. and independent researchers have indicated that the network appears to be tightly linked to Iran’s Islamic Revolutionary Guard Corps (IRGC). While Reuters could not confirm whether the IRGC directly controlled Shelbit or the gambling operation, the IRGC’s influence is clear through its ties to the Central Bank of Iran, the sanctioned exchange Nobitex, and wallets associated with the IRGC, as identified by the Israeli government. These connections suggest a broader network of illicit financial operations with deep state involvement.
The Central Bank of Iran has been under sanctions since 2019 because of its support for the IRGC, its specialized Quds Force, and the group Hezbollah. Shelbit’s role in handling funds for these and other restricted entities shows how crypto platforms can be exploited as tools for illegal financial activity, especially when they lack appropriate regulatory oversight. This situation has drawn significant attention from global investigators and law enforcement agencies.
Binance and the Flow of Funds
Reuters reported that Shelbit moved hundreds of millions of dollars through major cryptocurrency exchanges, including Binance, which is the world’s largest in terms of trading volume. Binance claimed that Shelbit never maintained an account on its platform and did not flag transactions connected to it as high risk. Nonetheless, the exchange conducted investigations into users associated with Shelbit, froze relevant accounts, and passed information to law enforcement. This shows the challenges faced by large crypto exchanges in tracking and preventing illicit flows.
The scheme mirrors a significant evasion network uncovered in 2016 when the U.S. dismantled a roughly $20 billion operation based in Turkey that was used to trade gold for oil, controlled by the IRGC. In May, the U.S. government also took possession of $1 billion in cryptocurrency from Iran, indicating the country’s ongoing efforts to use digital assets for illicit financial gains. Such operations suggest that Iran continues to seek ways to circumvent sanctions and fund state-backed activities.
Rich Sanders, a blockchain investigator specializing in Iranian-related activities, stated the scheme is 'an IRGC operation, and that’s plain as day.' However, Reuters was unable to verify whether the IRGC directly controlled Shelbit or the gambling network. The IRGC’s influence, however, is evident through its connections to various key players in this elaborate financial structure. As investigators continue to probe the situation, the broader implications for global crypto markets and financial oversight remain a key concern.