OFAC Goes Full Node: U.S. Sanctions Iran's Crypto Stack, From Hormuz Bitcoin Tolls to $100M Oil Routs 🛢️

The U.S. Treasury's Office of Foreign Assets Control sanctioned Iranian crypto exchange BitBank on Thursday, accusing it of processing Bitcoin payments from ships transiting the Strait of Hormuz on behalf of the Islamic Revolutionary Guard Corps. OFAC said that as of June, the Hormuz Safe Marine Services Authority used BitBank to forward transit payments collected from vessels to the IRGC. Treasury alleged BitBank moved "hundreds of millions of dollars' worth of Bitcoin" to the IRGC between June and July, and identified the exchange as controlled by Iranian financier Babak Zanjani, whom OFAC designated in January. The designation lists BitBank as established in 2024. Zanjani was sentenced to death in Iran in 2016 for embezzling from the National Iranian Oil Company, had his sentence commuted in 2024, and has advertised BitBank on his social media accounts since at least 2024.

OFAC also designated Pishtaz Simorgh Electronic Trade Company, described as the developer of BitBank's software and a subsidiary of the already-sanctioned Dot One Value Creation Group, along with three Dot One executives: Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein and Seyed Adel Heidari. Treasury described Hossein Ali Zaker Hossein as involved in most of Zanjani's sanctions evasion activity, including oil exports, and said he has brokered digital asset transactions that ended up with the IRGC. All five designations were made under Executive Order 13902. "Efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC's reach," said Treasury Secretary Scott Bessent. "If you support the Iranian regime, the Department of the Treasury will sanction you." The action is part of Operation Economic Outcast, the campaign Bessent announced on August 24 and dubbed Economic D-Day.

The BitBank action builds on a Monday expansion of OFAC's Iran sanctions framework, in which Treasury issued sectoral sanctions determinations covering digital assets, technology, gold, aviation and shipping, and sanctioned nearly 60 entities, individuals and vessels across nuclear, missile, cyber and oil networks. The digital asset determination allows OFAC to sanction foreign individuals and companies that operate in or provide services supporting Iran's digital asset sector. Treasury said Iran increasingly uses crypto as a "tool of choice for sanctions evasion," including for transactions linked to the IRGC and government insiders, and alleged that UAE-based Ukrainian broker Ivan Obukhov processed over $100 million in crypto payments since 2023 to facilitate oil sales on behalf of the IRGC's Quds Force. OFAC sanctioned Obukhov and his UAE-based company Foscom FZE.

The sector-wide measure follows a series of earlier designations against named crypto platforms linked to Iran. In January, OFAC sanctioned UK-registered Zedcex and Zedxion, marking its first Iran-related designations of digital asset exchanges. On June 3, Treasury sanctioned four Iranian crypto exchanges, including the country's largest platform, Nobitex, days after Bessent said the US had seized nearly $1 billion in cryptocurrency from Iranian exchanges and wallets. On Aug. 7, OFAC sanctioned exchanges Shelbit and Aban Tether, alleging they facilitated a combined $5 million in digital assets connected to Iran. In July, the U.S. government ordered the freezing of more than $130 million in USDt held in wallets linked to Iran, according to prior reporting.

Under the new framework, Treasury said designated parties' U.S.-linked property must be blocked, while foreign banks facilitating significant transactions for them could face restrictions on access to U.S. accounts. The Treasury said the digital asset determination "significantly expands" its ability to sanction foreign individuals and companies operating in or providing services supporting the covered sectors, and that any person determined to operate in Iran's digital asset sector will be subject to sanctions under Executive Order 13902. Cointelegraph reached out to BitBank for comment; Iran's BitBank is a separate entity from bitbank, inc, a fully licensed crypto exchange founded in 2014 in Japan and acquired by SBI Holdings in June.