US Sanctions Iranian Exchange BitBank Over IRGC Bitcoin Transfers

US Treasury targets Iranian digital asset infrastructure

US authorities have announced sanctions against BitBank, a cryptocurrency exchange based in Iran. A cryptocurrency exchange is a digital platform where users buy, sell, and trade digital assets. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) alleges the platform processed Bitcoin payments related to a maritime scheme in the Strait of Hormuz.

The Treasury claims that as of June, an entity called Hormuz Safe Marine Services Authority used BitBank to transfer payments to the Islamic Revolutionary Guard Corps (IRGC). This operation is reportedly part of a larger network used to move hundreds of millions of dollars in Bitcoin to support the IRGC.

Key details of the Treasury investigation

• BitBank allegedly processed Bitcoin paid by ships transiting the Strait of Hormuz as part of an insurance scheme.
• The sanctions also target Pishtaz Simorgh Electronic Trade Company, the developer of the exchange.
• Three associates of financier Babak Zanjani were included in the designations for their alleged roles in sanctions evasion.
• The US government claims these entities are key components of the Iranian regime's digital asset infrastructure.

Official statement from the US Treasury Secretary

US Treasury Secretary Scott Bessent stated that these actions make it clear that efforts to finance the Iranian regime through cryptocurrencies are within the government's reach. The Treasury identifies these digital asset platforms as tools for evading international financial restrictions.

Distinguishing Iranian BitBank from Japanese entity

The US Treasury clarified that the sanctioned BitBank was established in 2024 and is based in Iran. It is a separate entity from bitbank, inc., which is a fully licensed exchange founded in Japan in 2014. The Japanese company was acquired by SBI Holdings in June and is not involved in these sanctions.

Broader crackdown on Iranian crypto exchanges

This designation is part of a series of actions taken by the US to isolate Iran from the global financial system. In June, the Treasury sanctioned Nobitex, the country's largest exchange. In August, two other exchanges, Shelbit and Aban Tether, were also sanctioned.

Additionally, the US government ordered the freezing of more than $130 million in USDT in July. USDT is a stablecoin, which is a type of cryptocurrency designed to have a steady value by being pegged to a traditional currency like the US dollar. These moves come as Iran’s central bank has reportedly encouraged businesses to use cryptocurrency to bring overseas earnings home amid tightening restrictions.

Sources

• Cointelegraph