The U.S. Treasury has announced sanctions against BitBank, a cryptocurrency exchange located in Tehran, alleging that it facilitated the transfer of hundreds of millions of dollars in Bitcoin to Iran's Islamic Revolutionary Guard Corps (IRGC). The exchange also reportedly processed payments from vessels seeking passage through the strategically vital Strait of Hormuz.

Details of the Sanctions

  • BitBank has been accused of moving significant amounts of Bitcoin to the IRGC and managing fees for the Hormuz Safe Marine Services Authority, which charges tankers between $1 million and $2 million for guaranteed safe passage through the strait.
  • The sanctions freeze any assets BitBank has that fall under U.S. jurisdiction and threaten foreign entities facilitating transactions related to BitBank with exclusion from the U.S. financial system, although no specific cryptocurrency wallet addresses were identified.

This year, Iran has been charging shipping vessels between $1 million and $2 million to cross the Strait of Hormuz, and the U.S. Treasury indicated that some of these funds have been funneled through a Tehran-based cryptocurrency exchange since June.

A recent announcement highlighted that the Office of Foreign Assets Control (OFAC) designated BitBank, which was established in 2024, along with its software developer, Pishtaz Simorgh Electronic Trade Company.

Treasury Secretary Scott Bessent stated, "Today's designations of Iranian digital asset infrastructure make perfectly clear that efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC's reach." The OFAC claims that BitBank has been instrumental in transferring Bitcoin funds to the IRGC, a military entity that plays a significant role in Iran's economy and is classified as a terrorist organization by the U.S.

During this time, the Hormuz Safe Marine Services Authority, which has also been sanctioned since July, began utilizing BitBank to transfer the fees it collected to entities associated with the Iranian regime.

Developed by Iran's economy ministry, HormuzSafe offers insurance, traffic control, and emergency services to vessels that pay for safe passage. Shipping lawyers argue that this practice violates transit rights under international law, as noted by the OFAC.

A designation means that BitBank's assets within U.S. jurisdiction are frozen, and U.S. citizens are prohibited from engaging in transactions with it. The sanctions also pose risks for foreign firms: an exchange in Dubai or a bank in Istanbul processing BitBank transactions could be barred from the U.S. financial system, even if no American is directly involved in the transaction.

For offshore platforms serving Iranian users, the primary concern is the potential loss of access to U.S. dollars, rather than facing legal action in U.S. courts.

However, the recent sanctions did not include any specific wallet addresses, which are critical for compliance teams to monitor transactions effectively. The OFAC has previously published Bitcoin and Tron wallet addresses in other crypto-related sanctions, including a case involving Zedcex earlier this year.