The United States has imposed sanctions on an Iranian cryptocurrency exchange called BitBank. According to the Treasury, this exchange was used to transfer payments from ships passing through the Strait of Hormuz into Iran's financial system.
On Thursday, the Treasury Department's Office of Foreign Assets Control designated BitBank, which is controlled by a sanctioned financier named Babak Zanjani, along with its software developer and three associates of Zanjani.
The Iranian organization involved is Hormuz Safe Marine Services Authority, which has developed an alternative system for handling shipping traffic through the Strait.
The Treasury claims Hormuz Safe has been utilizing BitBank since June to send payments collected to the Iranian government. Additionally, it alleges that Zanjani used BitBank from June to July to transfer hundreds of millions of dollars in Bitcoin to the Islamic Revolutionary Guard Corps (IRGC).
This action is part of Washington's ongoing efforts to disrupt Iran's financial networks related to shipping through Hormuz.
In July, OFAC placed sanctions on Hormuz Safe and the Persian Gulf Marine Insurance Company, claiming they ran a scheme endorsed by the IRGC that required commercial vessels to buy Iranian-approved maritime insurance to cross the waterway.
Hormuz Safe provides services like insurance, traffic control, security, and emergency response, accepting Bitcoin and other digital assets. The Treasury states that this system enables Iran to generate revenue from ships while bypassing traditional financial channels that are subject to U.S. sanctions.
This approach arose as Iran sought to create a new regulatory framework for shipping through Hormuz. In June, Iran released new rules that mandated vessels to obtain passage permits, navigate designated routes, and hold approved insurance.
Industry groups later warned that this "toll by insurance" system effectively linked commercial access to the Strait with an Iranian-approved insurance mechanism.
The Persian Gulf Marine Insurance Company issues policies sanctioned by the Persian Gulf Strait Authority (PGSA), which was designated by the U.S. in May for collaborating with the IRGC and IRGC Navy to impose a permission-based system for commercial passage and collect fees from vessels.
The latest sanctions focus on the next stage in the payment process: what happens with the money collected from vessels.
Treasury noted that BitBank is part of a larger digital asset network created by Zanjani, who has been involved in Iran's efforts to evade sanctions. Zanjani was sentenced to death in 2016 for embezzlement linked to the National Iranian Oil Company. His sentence was reduced in 2024, and he later became involved in government-supported infrastructure and transportation projects.
Previously, OFAC sanctioned other cryptocurrency businesses associated with Zanjani before targeting BitBank.
Also designated were the developer of BitBank, Pishtaz Simorgh Electronic Trade Company, and three executives from Zanjani's Dot One business group: Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein, and Seyed Adel Heidari. Treasury alleges that network members were involved in Iranian oil exports and digital asset transactions that ultimately support the IRGC.
These sanctions were enacted under Executive Order 13902 as part of the Trump administration’s Operation Economic Outcast, which started in August and targets Iran’s oil trade, financial intermediaries, transportation networks, and other revenue sources.
The administration has continued to target Iran's shipping networks. In July, Treasury sanctioned over 50 individuals, companies, and vessels linked to oil trading and shipping networks alleged to help Iran evade sanctions.
For commercial shipping, the BitBank sanctions shed light on the financial framework behind Iran’s emerging transit system through Hormuz.
Washington has previously focused its sanctions on the entities organizing routing, insurance, and maritime services around the Strait. The BitBank designation expands that effort into the cryptocurrency infrastructure that Treasury claims is being used to shift proceeds.
As a result of these sanctions, properties and interests belonging to the newly designated parties that are under U.S. jurisdiction are frozen, while U.S. individuals are generally prohibited from engaging in transactions with them. The Treasury also cautioned that foreign financial institutions and other parties that interact with designated entities can face sanctions.