US Tightens Grip on Iran's Crypto Activity Under Operation Economic Outcast
The US Department of the Treasury has expanded its sanctions on Iran's crypto sector as part of Operation Economic Outcast, aiming to exert financial and economic pressure on the country amid ongoing military conflict. On August 24, the Treasury announced that it would now cover the entire Iranian digital asset sector under Executive Order 13902, allowing for targeted sanctions on any entity, including crypto exchanges or stablecoin issuers, operating in this sector.
This move signals a broader effort by the US government to crack down on Iran's crypto-enabled sanctions evasion activity. The Treasury's Office of Foreign Assets Control (OFAC) has already relied on long-standing terrorism-related authorities to sanction several entities for facilitating activity on behalf of the Islamic Revolution Guard Corps (IRGC). With this new determination, OFAC can now target any entity engaging in cryptoasset activity in Iran, offering a broader range of targets.
The expanded sanctions also enable the Secretary of the Treasury to prohibit US correspondent account services to non-US financial institutions that knowingly conduct or facilitate significant financial transactions involving the Iranian digital asset sector. This could have devastating consequences for third-country crypto firms providing services or liquidity to Iran's cryptoasset sector, as their access to the US financial system would be terminated.