US Sanctions Iranian Crypto Exchange Linked to Babak Zanjani

The US Treasury Department has sanctioned an Iranian cryptocurrency exchange controlled by financier Babak Zanjani, accusing the platform of helping transfer funds to Iran’s Islamic Revolutionary Guard Corps as Washington expands efforts to disrupt Tehran’s use of digital assets to evade sanctions.

The Treasury’s Office of Foreign Assets Control designated BitBank, its software developer Pishtaz Simorgh Electronic Trade Company, and three executives linked to Zanjani. The action was taken under an executive order targeting Iran’s economy and digital asset sector.

OFAC said BitBank had been used since June to transfer payments received by the Hormuz Safe Marine Services Authority, an entity previously designated by the US, to the Iranian regime.

According to the Treasury, Zanjani used BitBank between June and July to facilitate the transfer of hundreds of millions of dollars’ worth of Bitcoin to the IRGC. The US agency said the exchange forms part of a wider network of digital asset businesses established by Zanjani to move funds and evade sanctions.

Zanjani was sentenced to death in Iran in 2016 after being convicted of embezzling millions of dollars from the National Iranian Oil Company, which is itself subject to US sanctions. His sentence was commuted in 2024, and he subsequently returned to public activity, according to the Treasury.

OFAC also designated Pishtaz Simorgh, a subsidiary of the previously sanctioned Dot One Value Creation Group, saying the company developed the software used by BitBank and operated the brand behind the exchange.

The three individuals sanctioned are Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein and Seyed Adel Heidari. The Treasury identified them as executives or senior figures within Zanjani’s business network and said they had roles in facilitating digital asset transactions and other sanctions-evasion activities.

“Today’s designations of Iranian digital asset infrastructure make perfectly clear that efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC’s reach,” said Scott Bessent, US Treasury secretary.

The designations form part of Operation Economic Outcast, a campaign announced by Bessent in August that targets Iranian financial networks and revenue streams. The Treasury said the campaign is aimed at disrupting channels used by Iran to generate revenue, evade sanctions and finance activities targeted by US sanctions.

The latest action blocks any property and interests in property belonging to the designated entities and individuals that are in the United States or under the control of US persons. US persons are generally prohibited from conducting transactions involving their blocked property unless authorised by OFAC.

The restrictions can also extend to entities owned directly or indirectly by blocked persons at a level of 50 percent or more. Violations of US sanctions can expose US and foreign persons to civil or criminal penalties, according to the Treasury.

Source: FSX Business News