U.S. prosecutors are seeking to forfeit $61 million in cryptocurrency that they allege was generated from Iran’s illegal oil trade and earmarked to support the country’s military.
The Department of Justice filed a civil forfeiture complaint Monday, alleging that the crypto represents proceeds from unauthorized sales of Iranian crude oil and petroleum products.
The government claims the money was ultimately destined for Iran’s government and military bodies, including the Islamic Revolutionary Guard Corps (IRGC), which Washington has designated as a terrorist organization.
Deputy U.S. Attorney Sean S. Buckley said the forfeiture action is intended to disrupt the financial resources that Iran and its alleged terrorist proxies depend on to threaten people in the United States and elsewhere.
Buckley said Iran uses illicit sales of sanctioned crude oil to generate money for its military, support terrorism in the Middle East and other regions, and pursue additional activities involving nuclear weapons development and ballistic missiles capable of carrying nuclear payloads.
Prosecutors Uncover $1.5B Underground Network
The DOJ’s action comes as military tensions between the U.S. and Iran have intensified since February, disrupting international oil markets and sending energy prices sharply higher.
Iran’s crude exports have reportedly plunged amid a U.S. naval blockade and fighting near the Strait of Hormuz. Prosecutors allege that cryptocurrency has been used to help Iranian entities evade those restrictions and continue conducting transactions.
The DOJ said investigators traced a $1.5 billion underground financial network known internally as “Entity A.” The operation allegedly routed proceeds from Iranian black-market oil sales through a large collection of unhosted crypto wallets.
Because unhosted wallets are not controlled by centralized exchanges or other intermediaries, they can make it more difficult for authorities to identify and freeze funds.
According to prosecutors, the network transferred significant sums to an Iranian crypto exchange as well as to digital wallets and businesses allegedly connected to the IRGC.
Blessed Trust and Hexa Whale Allegedly Helped Move Funds
Two Chinese companies, Blessed Trust and Hexa Whale, have been identified by prosecutors as the main facilitators behind much of the alleged money movement.
The DOJ said both firms used Binance trading accounts to process millions of dollars in proceeds from black-market Iranian oil transactions before the funds were routed back to Iran’s government and affiliated groups.
Blessed Trust reportedly operates as a digital-asset custody service for financial companies. Prosecutors allege that it also provided fiat-to-crypto conversion services for Iran-linked transactions, sometimes using cryptocurrency issuers based in the United States.
Hexa Whale allegedly offered similar services while presenting itself as a legitimate commodities brokerage.
The DOJ said both firms had Chinese companies involved in oil and petroleum-product trading among their clients.
Binance Says It Enforces Sanctions Controls
Binance said it has a zero-tolerance policy toward sanctions violations and illicit financial activity and denied allowing transactions involving sanctioned individuals.
A company spokesperson told CoinDesk that Binance will continue cooperating with law enforcement authorities.
The exchange said it investigates potential sanctions or illicit-finance risks and can restrict or freeze accounts when warranted. It also said users may be removed from the platform and suspicious activity reported to the appropriate authorities.
