Reuters exposes $4B Iran sanctions dodge via Dubai crypto exchange

A Reuters investigation published on July 31 has exposed a $4 billion Iranian sanctions evasion operation routed through one of the world's largest illegal gambling networks, using a Dubai-based unlicensed cryptocurrency exchange called Shelbit as its central hub.reuters

The exchange, run by expatriate Iranian Siavash Kayvanpour from an office above a budget hotel in Dubai's Deira neighbourhood, has processed at least $4 billion in crypto since May 2024, according to data from two crypto investigative firms and independent blockchain researcher Rich Sanders, reviewed by Reuters.reuters

The Network

Shelbit's main customers include a Farsi-language gambling network of more than 2,000 websites, fronted by two Iranian influencers — Sasha Sobhani, a diplomat's son operating from a villa in Madrid, and Pooyan Mokhtari, who until recently lived in a luxury Hong Kong hotel after being expelled from Dubai.tbsnews+1

The exchange interacts directly with Iran's central bank, with wallets linked by the Israeli government to the Islamic Revolutionary Guard Corps, and with Nobitex, an Iranian exchange sanctioned by the U.S. earlier this year. At least $676 million in crypto flowed from Shelbit to Binance, the world's largest exchange, since May 2024.reuters

"It's an IRGC operation, and that's plain as day," Sanders told Reuters.reuters

Regulatory Response

Dubai's Virtual Assets Regulatory Authority issued a cease-and-desist order against Shelbit on July 24, citing violations of money-laundering and terrorism financing laws. The U.S. Treasury Department said it "is aware of these allegations and is taking them very seriously".tbsnews+1

Binance did not dispute processing hundreds of millions for Shelbit but said transactions "were not deemed high risk by an independent third-party blockchain analytics firm." The company said its compliance program "investigated, froze the relevant accounts, and reported them to law enforcement".reuters

The IRGC's Gambling Takeover

The investigation found the IRGC took control of Iran's largest online gambling operations years ago and used them to move money abroad, co-opting influencers to market the sites to millions of followers.tbsnews+1

"Ideology is the IRGC's branding while profit is its business model," said Miad Maleki, former associate director of the U.S. Treasury's Office of Foreign Assets Control. "When it comes to gambling, the IRGC learned the Islamic Republic's most lucrative lesson early: declare something illegal, then control both the prohibition and the black market".reuters

Mokhtari was arrested in Dubai in late March for allegedly financing Iranian terrorist groups, held for 35 days, then expelled. He returned to Iran in early July and has not posted on social media since.reuters