The U.S. Department of Justice has moved to seize $61 million in cryptocurrency tied to Iran’s black-market crude oil sales, filing a civil forfeiture complaint against funds prosecutors say were destined for the Iranian government and its military branches, including the Islamic Revolutionary Guard Corps (IRGC). The action, announced Monday, targets a sanctions-evasion scheme that the DOJ says leaned on Binance accounts and a network of unhosted wallets.
A $1.5 Billion Pipeline Through Unhosted Wallets
Prosecutors described what they called a $1.5 billion underground pipeline, internally dubbed “Entity A,” that moved black-market Iranian oil money through a web of unhosted cryptocurrency wallets. Because those wallets sit outside centralized exchanges, the DOJ said they function like stashing cash outside a bank, making the funds harder for authorities to freeze. The network allegedly transferred large sums directly to an Iranian crypto exchange and to wallets and businesses tied to the IRGC.
Two Chinese Firms Used Binance Accounts
The complaint names two Chinese companies, Blessed Trust and Hexa Whale, as the primary facilitators that coordinated the multi-million dollar transfers. Both allegedly used trading accounts on Binance to launder the black-market oil proceeds before funneling the funds back to Iran’s government and its proxies. Blessed Trust marketed itself as a digital-asset custodial services provider and offered a fiat-to-crypto ramp that at times relied on U.S.-based crypto issuers, while Hexa Whale posed as a legitimate commodities brokerage, prosecutors said. Binance, which earlier pushed back on Senator Richard Blumenthal’s accusations about the same firms, said it has zero tolerance for sanctions violations and did not permit transactions with sanctioned individuals, adding that it will keep cooperating with law enforcement.
Sanctions Evasion Amid U.S.-Iran Tensions
The forfeiture lands amid escalating missile warfare between Iran and the United States that has disrupted global oil flows since February and pushed energy prices higher. With Tehran’s own crude exports squeezed by a U.S. naval blockade and fighting around the Strait of Hormuz, prosecutors say Iran has leaned on crypto to bypass the restrictions, echoing the Treasury’s recent Iran sanctions sweep. “Today’s action demonstrates our determination to deprive the Government of Iran and its terrorist proxies of the illegal money they rely on to threaten the lives and safety of the citizens of the United States and elsewhere,” Deputy U.S. Attorney Sean S. Buckley said in the announcement.
