The U.S. government has filed a civil forfeiture complaint seeking more than $61 million in cryptocurrency that it alleges represents proceeds from the illicit sale of Iranian crude oil and petroleum products, escalating Washington’s efforts to disrupt the financial networks supporting Tehran’s sanctioned energy trade.
The complaint, filed by the U.S. Attorney’s Office for the Southern District of New York, alleges that Iran used a network of cryptocurrency intermediaries in China and elsewhere to launder more than $1.5 billion generated from black-market oil sales.
U.S. prosecutors said the money was ultimately intended to benefit the Iranian government, military, and Islamic Revolutionary Guard Corps, as well as support activities Washington considers terrorist or otherwise illicit.
Register for the next Tekedia Mini-MBA.
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
“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,” Deputy U.S. Attorney Sean S. Buckley said in a statement.
The case shows that sanctions enforcement is increasingly moving beyond conventional banking channels and into cryptocurrency infrastructure. As sanctioned oil sellers and buyers seek alternative ways to move money, U.S. authorities are targeting exchanges, wallet addresses, intermediaries and conversion services that prosecutors say help turn restricted commodities revenue into usable funds.
At the center of the complaint are two Chinese companies, Blessed Trust and Hexa Whale. Prosecutors allege that the companies used trading accounts at Binance to move and launder proceeds from Iranian oil sales before funneling the money to the Iranian government, its agents or proxies.
Binance said it has a zero-tolerance policy for sanctions violations and illicit activity and denied permitting transactions with sanctioned individuals.
“Binance did not permit any transactions with sanctioned individuals,” a company spokesperson said.
The exchange added that when sanctions or illicit-finance risks are identified, it investigates and, where appropriate, restricts or freezes accounts, removes users from the platform and reports activity to authorities.
The complaint alleges that Blessed Trust presented itself as a wealth-management or virtual-asset custodial services firm but provided services that went beyond conventional custody. Prosecutors said it received and transferred proceeds and provided “on-ramp” services, allowing users to convert fiat currency into cryptocurrency.
Some of those transactions allegedly involved U.S.-based cryptocurrency issuers.
Hexa Whale allegedly provided similar services and worked with Blessed Trust and related entities. Together, the two companies also allegedly used the U.S. financial system to send or receive tens of millions of dollars connected to the scheme.
Both companies reportedly served clients in China’s petroleum and petroleum-products industries, adding another layer to the case. The U.S. allegations suggest that the financial network was connected not simply to cryptocurrency trading but to the movement of money generated by a broader oil-trading ecosystem.
Crypto Becomes Another Sanctions Battleground
The case underpins a growing challenge for U.S. sanctions enforcement. Iran has spent years developing mechanisms to keep its oil exports moving despite restrictions, while Chinese buyers and refiners have remained an important outlet for Iranian crude.
The cryptocurrency allegations show how digital assets can be incorporated into that wider sanctions-evasion infrastructure. Crypto does not eliminate the need for conventional financial institutions. Oil transactions still require companies to pay suppliers, settle invoices, convert currencies, and move funds across borders. But digital assets can provide additional layers between the original commodity transaction and the ultimate recipient of the proceeds.
That makes intermediaries particularly important to enforcement efforts.
The U.S. complaint also illustrates why regulators have increasingly focused on so-called on-ramps, custodians, exchanges and stablecoin issuers. These businesses can become critical gateways between the traditional financial system and digital assets, creating potential points where illicit funds can be identified, frozen or redirected.
In this case, prosecutors allege that the network used both cryptocurrency infrastructure and the U.S. financial system. That combination could make the case significant for Washington because it suggests that sanctions evasion can operate through a hybrid financial architecture rather than an entirely offshore crypto network.
The treatment of the seized assets further highlights the role of stablecoins in modern sanctions enforcement. According to the complaint, Tether Ltd. will “burn” the cryptocurrency tokens held at the targeted addresses and issue replacement tokens of equivalent value. Those replacement tokens will then be transferred into U.S. government custody.
The arrangement demonstrates a feature of blockchain-based assets that can work in both directions for regulators. Digital transactions can make cross-border movement easier, but the traceability of blockchain transactions and the ability of certain token issuers to restrict or replace assets can also give authorities tools that do not exist to the same extent with cash or conventional offshore structures.
The forfeiture action comes as Washington has increased pressure on Chinese entities involved in processing Iranian crude. In April, the U.S. sanctioned an independent Chinese “teapot” refinery and warned financial institutions that they could face sanctions for dealing with Chinese refineries processing Iranian oil.
The pressure reflects the importance of China to Iran’s oil trade. China was reportedly responsible for more than 80% of Iran’s shipped oil in 2025, equivalent to an average of about 1.4 million barrels per day.
A Reuters report on Sept. 10 also found that Iran had used a barter-like arrangement to circumvent sanctions on its oil exports while acquiring billions of dollars’ worth of goods from China.
Together, the measures show that Washington is targeting multiple layers of the trade: the refiners buying Iranian crude, the intermediaries facilitating transactions and increasingly the financial infrastructure through which oil proceeds are converted and transferred.
For cryptocurrency companies, the case adds to the regulatory pressure surrounding sanctions compliance. Exchanges and token issuers are not merely being asked to monitor their own platforms. They are now expected to identify networks of counterparties and sanctions that can connect apparently ordinary crypto activity to sanctioned commodities and state actors.
For Iran, meanwhile, the case demonstrates the difficulty of turning sanctions evasion into fully insulated revenue. Even when oil can reach buyers and payments can be routed through intermediaries, the resulting funds can remain vulnerable at later stages of the financial chain.
The $61 million targeted by the U.S. government is only a fraction of the more than $1.5 billion prosecutors allege was laundered through the broader network. But the significance of the action may lie less in the amount seized than in the message it sends: Washington is now treating the financial plumbing behind Iran’s oil trade as a sanctions target in its own right.
The approach puts cryptocurrency exchanges, stablecoin issuers, custodians and payment intermediaries close to the front line of U.S. sanctions enforcement.