US Treasury sanctions two Iran-linked crypto exchanges

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Iran-linked cryptocurrency exchanges and one individual for allegedly facilitating over $5 million in money laundering tied to Iran-backed groups. The move, announced Tuesday, marks the latest effort by the Biden administration to disrupt digital financing networks that support Tehran’s military and proxy activities. The exchanges—BitcoinTrader and CryptoHopper—along with an individual identified as Amir H. Ghahremani, were added to OFAC’s Specially Designated Nationals (SDN) list, freezing any U.S.-held assets and barring Americans from doing business with them.

The sanctions come as Iran increasingly relies on cryptocurrency to bypass international financial restrictions, especially after the U.S. reimposed sweeping sanctions in 2018 following its withdrawal from the Iran nuclear deal. OFAC says the exchanges processed digital assets for entities linked to Iran’s Islamic Revolutionary Guard Corps (IRGC) and other sanctioned groups, converting crypto into cash or other assets to fund illicit activities. U.S. officials warn that crypto’s anonymity and cross-border nature make it a prime tool for evading sanctions, prompting regulators to tighten oversight on virtual asset service providers worldwide.

The crackdown reflects a broader shift in enforcement strategy. In 2022, OFAC penalized a crypto exchange for the first time for allowing transactions with Iran. Last year, it sanctioned a network of mixers and exchanges used by North Korea to launder stolen crypto. Chainalysis, a blockchain analytics firm, estimates that Iran-based entities moved at least $1.1 billion in crypto between 2019 and mid-2023, often using exchanges in high-risk jurisdictions. While crypto represents a small fraction of Iran’s overall economy, its role in sanctions evasion has grown as traditional banking channels shrink.

Going forward, OFAC is expected to target more crypto firms enabling transactions with sanctioned entities, particularly those operating in jurisdictions with weak anti-money laundering controls. The move also signals tighter scrutiny of peer-to-peer platforms and decentralized exchanges that may unwittingly or deliberately facilitate illicit finance. For exchanges, the penalties underscore the need for robust compliance programs—including real-time transaction monitoring and customer due diligence—to avoid falling afoul of U.S. sanctions. The broader stakes are clear: as crypto adoption rises in the Middle East and beyond, regulators are determined to close loopholes that fund geopolitical threats.