U.S. DOJ Pursues $61M Over Alleged Crypto-Laundered Iranian Oil Revenue

U.S. prosecutors are seeking to seize $61 million in cryptocurrency that they allege was generated through Iran’s illicit oil trade and used to support the country’s military and related activities.

The U.S. Department of Justice filed a civil forfeiture complaint Monday, targeting crypto proceeds that prosecutors say are connected to illegal sales of Iranian crude oil and petroleum products.

The complaint alleges that the funds were ultimately headed to the Iranian government and its military branches, including the Islamic Revolutionary Guard Corps (IRGC), which is designated by the U.S. as a terrorist organization.

Deputy U.S. Attorney Sean S. Buckley said the case reflects the U.S. government’s effort to cut off financial resources that Iran and its terrorist proxies allegedly use to threaten people in the U.S. and other countries.

Buckley also accused Iran of relying on sanctioned crude oil sales on the black market to finance its military, support terrorism across the Middle East and elsewhere, and pursue nuclear and ballistic-missile programs.

Investigation Uncovers $1.5B Crypto Network

The legal action follows an escalation in military hostilities between the U.S. and Iran since February, which has disrupted international oil markets and driven energy prices higher.

Iran’s crude exports have reportedly dropped significantly because of a U.S. naval blockade and fighting around the Strait of Hormuz. Prosecutors allege that crypto has been used to help bypass those restrictions and maintain the flow of Iranian-linked trade.

According to the DOJ, investigators identified an underground financial network worth roughly $1.5 billion that was internally called “Entity A.”

The operation allegedly moved proceeds from Iranian black-market oil transactions through a network of unhosted cryptocurrency wallets. Because these wallets operate outside centralized exchanges and third-party custodians, they can make it more difficult for authorities to freeze the assets.

Prosecutors said the network transferred substantial amounts to an Iranian crypto exchange, along with wallets and businesses allegedly associated with the IRGC.

Two Chinese Firms Linked to Transfers

The DOJ alleges that two Chinese companies, Blessed Trust and Hexa Whale, played central roles in facilitating most of the multimillion-dollar transactions.

Both companies allegedly used Binance trading accounts to process and launder proceeds from Iranian black-market oil sales before the funds were sent back toward the Iranian government and its affiliated organizations.

Blessed Trust reportedly presents itself as a digital-asset custody provider serving financial institutions. Prosecutors allege it also operated a fiat-to-crypto conversion service for Iran-related transactions and sometimes relied on U.S.-based cryptocurrency issuers.

Hexa Whale allegedly provided similar laundering services while presenting itself as a commodities brokerage.

The DOJ said the two companies had Chinese oil and petroleum-product businesses among their clients.

Binance Says It Enforces Sanctions Rules

Binance said it has zero tolerance for sanctions violations and illicit financial activity and maintained that it did not allow transactions involving sanctioned individuals.

A Binance spokesperson told CoinDesk that the exchange would continue cooperating with law enforcement during the investigation.

The spokesperson said Binance investigates potential sanctions and illicit-finance risks and can freeze or restrict accounts when appropriate. The exchange also said it removes users when necessary and reports relevant cases to the authorities.