American authorities are setting their sights on what they describe as a fraudulent digital currency stream supporting the Iranian military.
On Monday, the U.S. Department of Justice (DOJ) initiated a civil forfeiture lawsuit concerning $61 million in digital currency assets connected to illegal Iranian crude oil and petroleum transactions.
The court document asserts that the money was intended for the Iranian state and military divisions, specifically the Islamic Revolutionary Guard Corps (IRGC), which is classified by the United States as a terrorist group.
Deputy U.S. Attorney Sean S. Buckley stated that today’s enforcement action highlights their resolve to strip the Iranian administration and its terrorist associates of the unlawful funds they depend on to endanger the security and lives of Americans and people elsewhere.
Buckley further noted that the Iranian government utilizes unauthorized sales of embargoed petroleum to finance its armed forces and promote terrorism globally and across the Middle East, alongside other hostile activities aimed at advancing a nuclear initiative and ballistic missile technology capable of carrying nuclear warheads.
This legal step arrives during a period of rising missile hostility between the United States and Iran that began in February. The hostilities have heavily impacted worldwide petroleum transport and caused a significant surge in global energy costs. Tehran’s own petroleum shipments have plummeted because of an aggressive American naval blockade and localized combat near the Strait of Hormuz. Consequently, reports indicate that Iran has turned to cryptocurrencies to evade the embargo and sustain commerce.
Based on the announcement from the DOJ, investigators uncovered a massive $1.5 billion clandestine network, referred to as “Entity A,” which funneled illegal Iranian petroleum funds through an intricate network of self-hosted digital wallets.
Because self-hosted wallets keep digital tokens away from centralized platforms or external custodians, they operate similarly to hiding paper bills at home to stop officials from seizing them. This infrastructure routed huge amounts of illegal money directly to an Iranian digital currency platform, alongside digital addresses and companies connected to the IRGC.
Two Chinese entities, namely Blessed Trust and Hexa Whale, allegedly functioned as the main operators directing the vast bulk of these multi-million dollar movements.
The filing claims that both businesses utilized trading profiles on Binance to launder the illicit petroleum revenues prior to routing the capital back to the Iranian administration and its affiliates.
Binance maintained that it enforces a strict zero-tolerance policy regarding sanctions breaches and never allowed transactions involving sanctioned parties.
A representative for Binance communicated via email that the exchange maintains zero tolerance for illicit behavior or sanctions breaches, and that it permitted zero transactions with restricted individuals. The spokesperson added that Binance will maintain its collaboration with law enforcement, investigating, restricting, or freezing accounts when necessary upon discovering sanctions or financial crime risks, removing users, and notifying appropriate authorities.
Government attorneys pointed out that Blessed Trust, which brands itself as a digital asset custody provider for other financial institutions, delivered a fiat-to-crypto exchange gateway for these transactions tied to Iran, occasionally leveraging digital asset issuers based in the United States. In the meantime, Hexa Whale allegedly supplied identical money-laundering operations while disguising itself as a genuine trading firm.
Both organizations included Chinese oil and petroleum enterprises among their customer base.
Originally published at https://www.coindesk.com/markets/2026/09/15/u-s-doj-seeks-usd61-million-in-what-it-calls-crypto-laundered-iranian-oil-proceeds.
