The U.S. Department of Justice is moving to seize $61 million in cryptocurrency that prosecutors allege represents proceeds from Iran’s illicit oil trade and was ultimately intended to support the country’s military.
The DOJ filed a civil forfeiture complaint Monday against the cryptocurrency, alleging that the funds were generated through unauthorized sales of Iranian crude oil and petroleum products.
Prosecutors claim the money was being directed toward the Iranian government and military organizations, including the Islamic Revolutionary Guard Corps (IRGC), which the U.S. has designated as a terrorist organization.
Deputy U.S. Attorney Sean S. Buckley said the action is part of an effort to cut off financial resources that the Iranian government and groups linked to it allegedly use to threaten people in the U.S. and other countries.
Buckley said Iran depends on illicit sales of sanctioned crude to finance military activities and terrorism in the Middle East and elsewhere. He also alleged that the proceeds support other government efforts, including nuclear development and the production of ballistic missiles capable of carrying nuclear warheads.
$1.5B Crypto Network Allegedly Moved Iranian Oil Proceeds
The DOJ’s case comes amid heightened military conflict between Iran and the U.S. that has disrupted global energy markets and pushed oil prices higher.
Iran’s crude exports have reportedly suffered under a U.S. naval blockade and fighting near the Strait of Hormuz. Prosecutors allege that Iranian-linked entities have increasingly turned to cryptocurrency to work around those restrictions and continue moving funds.
According to the DOJ, investigators uncovered an underground financial operation worth approximately $1.5 billion that was internally identified as “Entity A.”
The network allegedly relied on numerous unhosted cryptocurrency wallets to transfer proceeds from Iranian black-market oil sales. Because these wallets are not maintained by centralized exchanges or other third parties, they can make it harder for authorities to freeze assets.
Prosecutors said the network moved large amounts of money to an Iranian cryptocurrency exchange, along with wallets and businesses allegedly connected to the IRGC.
Chinese Companies Accused of Helping Launder Funds
The DOJ identified Chinese firms Blessed Trust and Hexa Whale as major facilitators of the alleged operation.
Both companies allegedly used Binance trading accounts to process and launder millions of dollars generated from Iranian oil sales before sending the funds back toward the Iranian government and its associated organizations.
Blessed Trust reportedly describes itself as a digital-asset custody provider for financial firms. Prosecutors allege that it also helped convert fiat currency into cryptocurrency for Iran-related transactions, sometimes involving cryptocurrency issuers based in the U.S.
Hexa Whale allegedly provided comparable services while operating under the appearance of a legitimate commodities brokerage.
According to the DOJ, both companies had Chinese oil and petroleum-product businesses among their customers.
Binance Rejects Sanctions-Violation Claims
Binance said it does not tolerate sanctions violations or illicit financial activity and denied permitting transactions involving sanctioned individuals.
A Binance spokesperson told CoinDesk that the exchange would continue working with law enforcement authorities on the investigation.
The spokesperson said Binance investigates potential sanctions and illicit-finance risks and can restrict or freeze accounts when appropriate. The exchange also said it removes users from the platform when necessary and reports relevant activity to authorities.
