DOJ Targets Binance: $61M in Iranian Oil Laundered Funds Seized

The U.S. Department of Justice (DOJ) announced on Monday its move to seize and forfeit $61 million in cryptocurrency, alleging these funds originated from black-market sales of sanctioned Iranian oil. This sum represents a fraction of a much larger operation described by prosecutors in their civil forfeiture complaint, which details how a network of self-custodied wallets received and distributed over $1.5 billion in oil proceeds.

According to the filing, these illicit funds were routed to businesses linked to the Islamic Revolutionary Guard Corps (IRGC), various other cryptocurrency addresses, and an Iranian exchange. Furthermore, two China-based firms, identified as Blessed Trust and Hexa Whale, are accused of using trading accounts at Binance to launder these proceeds, ultimately funneling them back to the Iranian government and its proxies.

This enforcement action underscores the United States' ongoing efforts to crack down on Iran’s utilization of leading cryptocurrencies to circumvent international sanctions. In July, the U.S. had already reported freezing crypto assets, primarily in the form of Tether’s stablecoin, that were linked to the Iranian regime. Additionally, Iran initiated a Bitcoin-backed insurance service for its shipping companies earlier this year, indicating its broader strategy to use digital assets.

While Bitcoin was not explicitly mentioned in Monday’s claim, the Iranian government is also reportedly using this cryptocurrency to skirt sanctions. Bitcoin's decentralized nature means it has no central issuer or inherent blacklist function, and when held without intermediaries, it cannot be easily frozen, providing a pathway for sanctioned entities to conduct financial transactions.

Deputy U.S. Attorney Sean S. Buckley emphasized the gravity of the situation, stating, “The Government of Iran relies on black-market sales of sanctioned crude oil to fund its military and foster terrorism in the Middle East and around the world, along with other malign efforts to develop a nuclear program and ballistic missiles capable of delivering nuclear payloads.” He further alleged that Iran leveraged a network of cryptocurrency actors, including those in China, to launder more than $1.5 billion in illicit oil money intended to benefit the Iranian military and the terror-designated IRGC.

The civil forfeiture complaint explicitly implicates Chinese companies Blessed Trust Limited and Hexa Whale Trading Limited in the laundering of these illicit oil revenues. Federal authorities stated that once laundered, the money was directed back to Iran’s government, its agents, and its proxies. Further evidence of Iran's crypto-based sanction evasion came in July when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) revealed that Iran had been accepting payments in Bitcoin from ships passing through the Strait of Hormuz, specifically through a platform called Hormuz Safe, developed by Iran’s Ministry of Economy.

More recently, the Financial Times reported last week that the Middle Eastern nation was actively using Bitcoin to settle cross-border transactions via Iranian crypto exchanges. This strategy emerged after the central bank reportedly advised its countrymen to engage in necessary actions to bolster the national economy, highlighting a concerted governmental push towards cryptocurrency use for economic resilience amidst sanctions.