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practices
In the period leading up to ex-US president Donald Trump reintroducing heavy sanctions against Tehran in May 2018, the Iranian rial entered a spiral of depreciation against hard currencies, presenting Seif and colleagues—who have also been sentenced to jail terms—with the need to adopt crisis measures to curb its loss of value. In relation to those measures, Seif was found guilty of “participation in disrupting the country’s financial system through illegal smuggling of foreign currency”.
Previously, in May, Tehran’s prosecutor general announced that an indictment had been issued against Seif and that his case was to be sent to a special court set up to investigate financial crimes. At the time, Seif stood accused of “wasting” $30bn and 60 tonnes of gold reserves.
Also sentenced on October 17 was Ahmad Araghchi, nephew of former top nuclear deal negotiator Abbas Araghchi, who was deputy for foreign currency affairs at the central bank until his arrest in 2018. He was handed eight years in prison. Salar Aghakhani, said to have been the point person on the ground for the officials’ illegal scheme, was given 13 years in absentia.
The rial’s all-time low of 320,000 to the dollar came in October 2020. It currently trades at more than 270,000 on the the open market. Prior to the Trump turbulence, its rate was below 40,000 per USD.
Mizan, the official news outlet of the judiciary, said on October 17 that Seif and Araghchi hired the inexperienced Aghakhani—who had bribed Meysam Khodaei, an adviser at the presidential office, who was also sentenced to prison—to covertly distribute foreign exchange in the roiled market in an effort to help restore some calm.
Aghakhani was said to have received packages containing dollar, euro and dirham banknotes worth between $5m and $8m 28 times, and to have distributed the money among selected currency exchanges with meagre supervision from the central bank. Seif was said to have been fully aware of the scheme.
The scheme failed to ease tensions in the market and also led to the waste of hundreds of millions of dollars and their distribution among speculators inside and outside the country, Mizan reported.
7.1 Cryptocurrency
Iran preparing to pilot ‘e-toman’ national cryptocurrency
The Central Bank of Iran (CBI) has said it plans to soon launch the country's long-awaited national cryptocurrency, IBENA reported on January 17.
Iran has mulled launching an “e-toman” for the past couple of years to assist in working around sanctions and breaking free of US restrictions on payment controls, including SWIFT and interbank transfers. However, technical and political concerns have slowed down the roll-out of the cryptocurrency, currently designated the Central Bank Digital Coin (CBDC). Internally, cryptocurrencies as an alternative asset class in Iran have had a bumpy ride. The security services have repeatedly tried to stamp out instances of their use, threatening jailtime to some of those involved in crypto mining and trading.
34 IRAN Country Report February 2022 www.intellinews.com