Dubai-based crypto exchange tied to $4 billion Iran sanctioned-evasion network

Dubai-based crypto exchange tied to $4 billion Iran sanctioned-evasion network

Shelbit allegedly sent hundreds of millions of dollars to major crypto exchanges, including Binance, as it linked gambling sites and sanctioned Iranian entities to global crypto markets.

• A vast Dubai-based illegal gambling network is allegedly channeling millions of dollars in cryptocurrency through Shelbit, an unlicensed exchange at the center of a $4 billion Iranian sanctions-evasion scheme, according to Reuters.
• Shelbit, run by Iranian expatriate Siavash Kayvanpour, has allegedly moved hundreds of millions of dollars through major crypto platforms and provided access to global markets for Iran’s central bank and other sanctioned entities.
• U.S. and independent investigators say the operation appears closely tied to Iran’s Islamic Revolutionary Guard Corps, even as Reuters reports it could not confirm direct IRGC control over Shelbit or the gambling network.

A major illegal gambling network based in Dubai is sending millions of dollars’ worth of cryptocurrency through an alleged $4 billion Iranian sanctions-evasion operation, Reuters reported on Friday.

Considered one of the world’s largest, with more than 2,000 platforms, the illegal gambling network is a major customer of Shelbit, an unlicensed crypto exchange run by Iranian expatriate Siavash Kayvanpour.

Shelbit is the hub of the Iranian money-moving operation, through which the gambling network, Iran’s central bank and other sanctioned Iranian entities have access to global crypto markets, the report said. The Central Bank of Iran has been sanctioned under U.S. counterterrorism authorities since 2019 over its support for the Islamic Revolutionary Guard Corps (IRGC), its Quds Force, and Hezbollah.

Shelbit has moved hundreds of millions of dollars to some of the most prominent crypto companies, including Binance, the world’s largest exchange, according to the report.

Binance said Shelbit had never held an account on its platform and that transactions linked to Shelbit were not considered high risk, Reuters reported. The exchange said it investigated users associated with Shelbit, froze relevant accounts and reported them to law enforcement.

“This is by far the biggest Iranian illegal gambling network ever discovered and one of the biggest in the world,” said John Wojcik, a former researcher at Infoblox and now senior analyst at TRM Labs, who spent seven years investigating illegal gambling for the United Nations Office on Drugs and Crime.

It is also one of the largest Iranian sanctions-evasion networks discovered since 2016, when the U.S. broke up a roughly $20 billion IRGC gold-for-oil operation based in Turkey. Separately, the U.S. seized $1 billion in crypto from Iran in May.

“It’s an IRGC operation, and that’s plain as day,” Rich Sanders, an independent blockchain researcher and investigator focused on Iran, said of Shelbit. Reuters said it could not determine whether the IRGC directly controlled Shelbit or the gambling network.

The IRGC, founded in 1979, is the country’s most powerful and influential military, political and economic institution that answers directly to the country’s supreme leader, Mojtaba Hosseini Khamenei.

Shelbit also interacts directly with Iran’s central bank, wallets linked to the IRGC by the Israeli government, and Nobitex, an Iranian exchange that the U.S. government sanctioned earlier this year after a Reuters investigation revealed its ties to the government. Some of the crypto flowing to Shelbit came from what the two investigative firms described as an Iranian bitcoin mining operation that creates new digital coins.