The US Department of Justice (DOJ) has filed a lawsuit seeking the seizure of approximately $61 million worth of cryptocurrency allegedly linked to the Iranian government and the Iranian Revolutionary Guard Corps (IRGC), claiming that proceeds from the black market sale of sanctioned Iranian oil were laundered through Binance.
According to a statement from the U.S. Attorney’s Office for the Southern District of New York, these crypto assets are believed to represent a portion of the proceeds from the illicit sale of Iranian crude oil and petroleum products. Authorities allege that these funds were intended to finance the Iranian government and entities affiliated with the Iranian military, including the IRGC, which the U.S. designates as a terrorist organization.
The complaint filed by the prosecution alleges that two China-based companies, Blessed Trust and Hexa Whale, used trading accounts on the UAE-based cryptocurrency exchange Binance to help launder proceeds from the sale of Iranian oil.
According to US authorities, Blessed Trust, while presenting itself to finance and crypto service providers as an asset management or digital asset custody company, was in reality involved in transferring funds obtained from the sale of Iranian crude oil and petroleum products. The company was also alleged to have offered services enabling the conversion of fiat currencies into cryptocurrencies, using US-based cryptocurrency issuers in this process.
Hexa Whale reportedly presented itself as a commodities brokerage firm but conducted similar transactions with Blessed Trust and related parties. It was noted that the clients of both companies included firms operating in the Chinese oil and petroleum products sector.
The investigation alleges that a group of interconnected personal cryptocurrency addresses, dubbed “Entity A,” received and distributed over $1.5 billion in funds derived from the illicit sale of Iranian oil. Transfers were allegedly made from these addresses to money handling companies linked to the IRGC, other cryptocurrency addresses, and an Iran-based cryptocurrency exchange.
US prosecutors alleged that Blessed Trust and Hexa Whale used complex cryptocurrency transfer and address networks to conceal the nature, origin, and true owners of transactions. It was claimed that the companies facilitated tens of millions of dollars in money transfers through the US financial system under this scheme.
Assistant US Attorney for the Southern District of New York, Sean S. Buckley, stated that the Iranian government uses its sanctioned oil sales to finance its military and operations in the region, and that the investigation alleges that cryptocurrency actors in China and other countries played a role in laundering more than $1.5 billion in illicit oil revenues.
FBI New York Field Office Deputy Director James C. Barnacle Jr. stated that the operation demonstrated the ability to track cryptocurrency networks used to circumvent sanctions, and that cutting off funds from black market oil sales aimed to reduce the financing capacity of the Iranian military and related entities.
*This is not investment advice.
