U.S. Seizes $61 Million in Crypto Tied to Iranian Oil Sales on Binance

The U.S. Attorney's Office for the Southern District of New York filed a civil forfeiture complaint Tuesday targeting roughly $61 million in cryptocurrency. Prosecutors say the digital assets were generated through illegal black market sales of Iranian crude oil and petroleum products.

The action was announced by Deputy U.S. Attorney Sean S. Buckley and FBI New York Field Office Assistant Director in Charge James C. Barnacle, Jr. The complaint seeks to place the cryptocurrency into U.S. government custody through civil forfeiture proceedings.

"Today we are seizing and seeking to forfeit more than $61 million of the Government of Iran's money, which otherwise would have promoted hostile military action and terrorist attacks against the U.S. and our allies," Buckley said in a statement.

According to the complaint, two Chinese companies, Blessed Trust and Hexa Whale, used trading accounts at cryptocurrency exchange Binance to launder proceeds from illegal Iranian oil sales. Prosecutors allege the companies funneled funds to the Iranian government and its proxies.

Those alleged recipients included Iran's Islamic Revolutionary Guard Corps, which is designated by the United States as a terrorist organization. The complaint connects the cryptocurrency transactions to a broader network used to move revenue from unlawful sales of Iranian crude oil and petroleum products.

Blessed Trust presents itself to financial services providers as a wealth management or virtual asset custodial firm, according to the complaint. Prosecutors contend that the company instead received and transferred oil sale proceeds while helping convert fiat currency into cryptocurrency.

That conversion activity included transactions involving cryptocurrency issuers based in the United States, the complaint alleges. Prosecutors say the company's stated financial services role did not reflect the oil revenue activity described in the filing.

Hexa Whale publicly describes itself as a commodities brokerage, according to the complaint. Prosecutors allege that it operated a parallel system alongside Blessed Trust for handling proceeds linked to illegal Iranian petroleum sales.

Both companies count Chinese businesses in the oil and petroleum sector among their clients, the complaint states. The allegations focus on how their trading accounts, cryptocurrency addresses and financial transactions were allegedly used to conceal the movement of money.

Prosecutors also identified a network of interconnected cryptocurrency addresses that were not hosted by an exchange or another financial institution. The complaint groups those addresses under the label "Entity A."

More than $1.5 billion in revenue from unlawful Iranian oil transactions flowed through those addresses, according to the complaint. The filing alleges that the money ultimately reached money services businesses connected to the Islamic Revolutionary Guard Corps, other wallets associated with the organization and at least one Iranian cryptocurrency exchange.

Blessed Trust and Hexa Whale used transactions and addresses structured to hide the source and ownership of the funds, prosecutors alleged. The two companies also used the U.S. financial system to send or receive tens of millions of dollars as part of the alleged operation.

The arrangement described in the complaint calls for stablecoin issuer Tether to destroy the tokens held in the flagged addresses, according to CNBC. Tether will then mint new tokens of equivalent value, which will be transferred into U.S. government custody.

Binance said it has "zero tolerance for sanctions violations or illicit activity" and "did not permit any transactions with sanctioned individuals." The cryptocurrency exchange said it would continue cooperating with law enforcement authorities.

Binance also said it would investigate, restrict or freeze accounts when sanctions risks or risks involving illicit finance are identified. Its response directly addressed the accounts cited by prosecutors while emphasizing its stated policies on prohibited activity.

The case remains a civil forfeiture action, and the complaint contains allegations rather than proven findings. The filing states that no facts are established unless a court issues a judgment in favor of the United States.