Binance Enters Syrian Market After U.S. Lifts Sanctions

Binance, a leading global cryptocurrency exchange, has announced its entry into the Syrian market following the lifting of certain sanctions by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC). This move marks a significant turning point for millions of Syrian residents who have been previously shut out from the global crypto space due to international sanctions.

For many years, Syrians have been unable to access major crypto platforms like Binance, which has limited their ability to participate in the digital economy. The local currency's devaluation and reliance on remittances from family members abroad have driven many Syrians to seek alternative financial solutions. With the lifting of sanctions, Binance has removed Syria from its list of prohibited countries, allowing Syrian residents to access a wide range of crypto services.

Binance aims to support new Syrian users through educational tools and Arabic-language support, ensuring that everyone can use crypto easily and safely. The platform now offers Syrian users a full suite of services, including spot and futures trading, staking, stablecoins, and Binance Pay for cross-border payments. Additionally, Arabic educational resources have been introduced to help new users navigate the crypto landscape confidently and securely.

The interest in crypto among Syrians has been high, as evidenced by the region's ranking in crypto-related internet searches. Many Syrians were eager to learn about digital currencies but lacked a safe and legal way to get started. With the lifting of sanctions, Syrians now have the opportunity to engage in various crypto activities, such as buying Bitcoin, sending USDT to family abroad, or earning yield on crypto holdings, all within Binance's secure environment.

The easing of sanctions by the U.S. government includes broad authorizations that permit various economic activities in Syria. OFAC's General License (GL) 252 allows U.S. persons to engage in transactions previously prohibited by the Syrian Sanctions Regulations, with exceptions for transactions involving blocked persons. This includes the provision of services, new investments, and the import of petroleum and petroleum products from Syria. Additionally, GL 252 allows transactions with 28 named blocked persons and entities owned 50% or more by those persons, which were previously sanctioned under various regulations.

Concurrently, the U.S. government has taken additional steps to provide sanctions relief. The State Department issued a waiver to the Caesar Act, allowing non-U.S. persons to engage in activities authorized for U.S. persons by GL 252 without fear of secondary sanctions. This waiver is set to expire after 180 days. FinCEN also issued exceptive relief authorizing U.S. banks to open and maintain correspondent bank relationships with the Commercial Bank of Syria, which had previously been identified as a financial institution of primary money laundering concern. Furthermore, FinCEN rescinded two prior advisories related to Syria, warning U.S. financial institutions about the risk of transactions involving persons specifically designated for sanctions.

Despite the easing of sanctions, there are still residual risks and restrictions that firms engaging in business in Syria should be mindful of. These include limitations to GL 252, restrictions related to individuals and entities still designated due to their ties to the Assad regime, export restrictions imposed by various countries, and the risk associated with Syria's continued status as a state sponsor of terrorism. Additionally, Syria appears on the Financial Action Task Force's (FATF) Grey List, which identifies jurisdictions with strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. Financial institutions should take particular care when dealing with such jurisdictions given the heightened risk associated with anti-money laundering and financial crime.

Firms looking to enter the Syrian market should ensure that their transaction monitoring processes and sanctions screening capabilities can identify and interdict activity that may be indicative of terrorist financing, sanctioned parties, and other threat finance risks remaining in Syria. Businesses should also anticipate their exit plans and consider contractual clauses that would protect their interests or minimize their losses if the sanctions in Syria are completely or partially restored. The evolving policy and sanctions environment in Syria requires firms to plan for potential changes in sanctions as a result of U.S. government diplomatic, policy, and security considerations.